Commerical liberalism

Liberal internationalism is defined by Griffiths, O'Callaghan and Roach (2008, p. 190) as a project to transform international relations so that they conform to models of peace, freedom, and prosperity allegedly enjoyed within constitutional liberal democracies. 

The same scholars go further by dividing liberalism into 3 distinct groups. They say these are the three ways to implement the project. The way they present liberal internationalism as a project makes their work interesting.

Firstly, commercial liberalism is about free trade between states. States bilaterally or multilaterally via a platform like APEC pursue the goal of trade liberalization. Griffiths, O'Callaghan and Roach (ibid.) stated that economic interdependence would decrease the likelihood of going to war. 

Republican liberalism is about democratic peace. Griffiths, O'Callaghan and Roach (ibid.) stated that; the spread of democracy among states so that governments will be accountable to their citizens, makes it difficult to pursue policies that promote the sectional interest of economic and military elites.  

The final variant of liberalism is regulatory or institutional liberalism. This implementation of the project involves the building of the international political structure. International institutions are important because they promote the rule of law and moderate the security dilemma among nations according to Griffiths. O'Callaghan and Roach (ibid.).

The particular variant of liberalism we are interested in for this week is commercial liberalism. Commercial liberalism, according to Griffiths, O'Callaghan and Roach (ibid.), promotes the idea of free trade and commerce across state borders on the assumption that economic interdependence among states will reduce incentives to use force and raised the cost of doing so. 

Free trade is defined by Investopedia as the unrestricted purchase and sale of goods and services between countries without the imposition of constraints such as tariffs, duties and quotas. Free trade is a win-win proposition because it enables nations to focus on their core competitive advantage(s), thereby maximizing economic output and fostering income growth for their citizens. 

In the video by Allen Sens from the University of British Columbia (below), he outlined six principles of free trade, which are considered as norms in international law. I say norms based on the distinction by Krasner (2006), he said norms are standards of behaviour defined in terms of rights and obligations.

We now accept that when we sign a free trade agreement we agree to reduce tariffs. All states who are party to the agreement are obliged to comply with this norm and the five other norms associated with free trade like reduction of non-tariff barriers, nondiscrimination, national treatment, reciprocity and exemptions.

If a state who is a party to the agreement decides not to reduce tariff or introduce some non-tariff barriers to protect its domestic industries then there will be repercussions. Whatever repercussive measures taken by the other party (parties) like trade sanctions is justifiable because of the protectionist state’s inability to respect the agreement.

Hypothetically, this can happen to PNG via the APEC fora. Our government might want to protect the car-manufacturing sector by charging high tariff on imported cars in order to grow the local car-manufacturing sector. Japan, being a member of APEC, might dispute this measure because as APEC members the agreement was to reduce tariff on imported vehicles from Japan so a good number of Papua New Guineans will have the opportunity to purchase brand new vehicles.

In the Pacific Island Forum, the Pacific Island Countries Trade Agreement (PICTA) mentions the 6 norms in various segments. For example, in Article 2 on Objectives, we have this statement: 

"promote and facilitate this expansion and diversification through the elimination of tariff and non-tariff barriers to trade between the Parties in a gradual and progressive manner, under an agreed timetable, and with a minimum of disruption."

These six norms are a key part of the World Trade Organization (WTO). WTO replaced the General Agreement on Tariffs and Trade(GATT) in 1995, where 125 nations became signatories to its agreements, which had become a code of conduct governing 90% of world trade.

References:

Griffiths, M., O’Callaghan, T., & Roach, S. C. (2008). International relations the key concepts (2^nd ed.). New York: Routledge.

Krasner, S. D. (2007). Structural causes and regime consequences: Regimes as intervening variable. In B. A. Simmons and R. H Steinberg, International law and international relations. (pp. 3-17). Cambridge: Cambridge University Press.