Only dealing with equals?

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Last month, Wales’ First Minister gave us the benefit of his opinion on free trade deals following Brexit.  Superficially, his suggestion that we should not do free trade deals with countries that have lower levels of income than us is politically attractive. None of us wants to see Welsh companies being undercut or Welsh jobs being exported to low wage economies elsewhere.  There is a problem with this approach though, because it looks at things only from one narrow point of view.

If every country took the same view, then no country wealthier than Wales would ever want to do a deal with us.  After all, they wouldn’t want to see their jobs lost to a lower-wage economy like Wales, would they?  So one possible logical consequence of the First Minister’s position is that countries only ever do deals with other countries whose income per head is roughly similar; and that’s a recipe for locking the relative wealth of different countries and regions into its current position.  If free trade helps to spread wealth – and that’s the implication of the First Minister’s position - then under this approach the rich stay rich and the poor stay poor.  An ‘interesting’ stance for a Labour politician. 

But the likelier consequence is that there would simply be no free trade deals.  Perhaps that’s what the First Minister meant, even if it’s not quite what he said.  It would be a radical change of policy, and it would be interesting to see him spell out what it might mean in practice.  Some of the outcomes might well be positive over the longer term  - in terms of relocalising the economy and reigning in globalisation - even if, overall, it led to a reduction in international trade.  If moving towards that was really what he meant, he has a point worthy of much more detailed discussion and examination, not least in terms of handling the shorter term negative impacts.  I suspect, though, that he just hadn’t thought through what he was saying.