An exposition of freer trade

IN 1851, the Great Exhibition was held in London, with the purpose-built Crystal Palace (the structure with the greatest area of glass ever seen) housing a triumphalist display of British industry, science and culture. Co-organised by Prince Albert, the event is often considered one of the defining moments of the Victorian era. Exhibitors were not just British, but also from ‘Colonies and Dependencies’ (which would have included the Straits Settlements but no Malay States) and ‘Foreign States’.

Although there was an attempt by Paris to showcase its own industrial successes in 1844, the 1851 Great Exhibition is the first in the list of official universal expositions of the world recognised by the Bureau International des Expositions, which oversees the organisation of World Expositions.

Malaysia has been participating in such expos since 1970, though recent contributions have been noteworthy. In the Shanghai World Expo 2010, the Malaysian pavilion had a Minangkabau roof and was emblazoned with a Malaysian batik design. The Milan World Expo 2015 saw seed-shaped oval structures “made from wood sustainably harvested from Malaysian forests”.  Specialised expos in Yeosu in 2012 and Astana last year focused on biodiversity and green technology respectively: the latter touted as a great success for trade and investment.

There is also the usual array of cultural performances, traditional dances, music and a sample of Malaysian cuisine. And there has been praise as well as criticism: Malaysian visitors who think that other countries have better pavilions, or suspicions about the cost and beneficiaries of our efforts.

Like many international events, different cities bid to host the Expo, creating diplomatic negotiations. Last week, a French delegation was in town to seek Malaysia’s support for the 2025 expo being in Paris rather than Osaka, Baku or Yekaterinburg (2020 will be in Dubai with a specialised one in Buenos Aires in 2023). It was led by Pascal Lamy, who served as the director-general of the World Trade Organisation from 2005 to 2013.

He was kind to make some time for lunch and a talk hosted by the Institute for Democracy and Economic Affairs (Ideas) on the importance of global trade in the age of rising protectionism. Noting that non-tariff barriers in Asean have increased significantly in the 21st century, Lamy stated that this is a global phenomenon. The protectionist discourse has gained currency because social assistance has not kept pace with the speed of globalisation, and furthermore the benefits of freer trade have not been felt equally; thus creating a backlash. This is a familiar argument to those exploring the victories of Brexit and Trump.

So far, Lamy continued, protectionism has not caused serious damage to global trade, even though the ratio between the increase in volumes of trade and gross national product (GNP) has reduced in recent times. The main threat is when a major economic power, such as the United States, takes a protectionist approach that causes global institutional change. President Donald Trump’s comments on trade imply mercantilism (ie “exports good, imports bad”), and has called the WTO’s role into question.

Lamy concluded by speaking of an “old world of trade” in which producers are protected giving way to a “new world of trade” in which consumers are protected from risk: what he calls “precaution”. This manifests in, for example, safety standards for certain products; often pushed by powerful corporations rather than sovereign governments.

The questions took mostly a bleak tone. Plainly stating that capitalism has decreased poverty significantly while increasing inequality, he argued for redistribution from those who benefit most to those who benefit least. On China, he suggested that it hasn’t significantly liberalised trade since it joined the WTO, and expressed concerns about whether an authoritarian political system could lead a global economy. Earlier, musing on his own country’s place in the world with its increasingly visible president, Lamy recalled that the Eiffel Tower, built for the 1889 Universal Exposition, was a product of a liberal era of France’s economy: a product of private enterprise.

The 1851 Great Exhibition was condemned by Karl Marx as “an emblem of the capitalist fetishism of commodities”. Upon visiting, Charlotte Bronte wrote, “it seems as if only magic could have gathered this mass of wealth from all the ends of the Earth”.

Since independence, Malaysia has been part of a free trade world and has benefited tremendously from it. Our open economy has been credited for slashing our poverty rate and helping to create a professional middle class.

But as Malaysia gets caught within global economic shifts, how we respond to the issues of trade liberalisation, inequality and corruption will determine what we will exposit in the years to come.

Tunku Zain Al-Abidin is founding president of Ideas.

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