What can global trade make possible?
This Sunday, heads of state and government from seven economically important countries will meet in a sanctuary of the Bavarian Alps, Germany, for their 48th G7 summit and talk about what they mostly talk about at G7 summits: global trade.
The Group of Seven (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, plus the European Union as a 'non-enumerated member') represents the world's largest economies and wealthiest liberal democracies, and it accounts for over 50 per cent of global net wealth.
Therefore, no body is better suited to find an answer to a central question of global politics: How can trade contribute to promoting freedom and democracy worldwide?
For a long time, it was thought that the increase in world trade would coincide with the rise of democratic structures and states. And for a long time, this was true. The cross-border export of goods had only one direction: more exports. Cross-border goods traffic has doubled in the last twenty years and twentyfold compared to 1960. For a while, the number of democracies also increased. But the development has reversed. Less than half the world lives in a democracy.
The hope had been different. The hope had been that democracies would prevail as a result of increasing trade. Change through trade had been the watchword for many years after the fall of the Iron Curtain.
The assumption was that after material needs were met, the desire for social and political needs would become so strong that populations would overthrow authoritarian regimes. The assumption was wrong.
It was partly the other way around: increasing prosperity supported regimes. Because the population thanked the regime for prosperity. Because the economic upswing gave rulers the financial means to become more stable, be it through donations to those who support the regime or through the purchase of military equipment.
China and Russia are the prime examples of how "change through trade" hasn't worked.
However, the two current prominent examples also block the view for bright spots. Change through trade has worked in some cases.
For example, in the European Union.
The attractiveness of the EU lies in its common internal market. Any country that becomes part of the internal market increases its prosperity significantly. That is why the attractiveness of the European Union is mainly unbroken, despite some problems.
But to become part of the European Union states not only have to abide by trade rules. The rule of law, democracy and human rights are also part of it.
It is now considered scientifically proven that, especially for Eastern European countries, accession to the EU was beneficial for their development into democracies.
So it would be one-sided to claim that trade only strengthens totalitarian regimes. In addition to the prosperity that world trade brings, it can also promote democracy and freedom.
If there is something to be learned from the two opposing developments, it might be this: It is not trade itself but the prospect of free trade that can bring political change for the better. If a country knows that it can improve its economic situation by starting to change its political system, sometimes it will do so.
What does that mean for the G7 summit in particular and for the future of world trade in general?
I speak my mind: We must link trade to change more strongly than we have done yet. We must support those who stand up for freedom and democracy. We must entice with free trade. Those who respect human rights, the rule of law and democracy will be rewarded with prosperity through free trade.
Therefore we need a worldwide free trade zone for all democracies. Every country that complies with the rules is welcome to join. Such a club would make it clear to everyone what there is to gain economically if states adhere to the rules of good coexistence. The upcoming G7 summit would be the perfect starting point for such a free trade club of democracies.