Commercial Liberalism: Promoting Peace, Prosperity, and Free Trade

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In the realm of international relations, various scholars have explored the concept of liberal internationalism, aiming to transform global interactions into models of peace, freedom, and prosperity akin to those experienced within constitutional liberal democracies. Among the different branches of liberalism, one that stands out prominently is commercial liberalism, which seeks to foster free trade between states. In this blog post, we will delve into the core principles of commercial liberalism, its benefits, and how it has influenced trade agreements between nations.

Commercial liberalism, as defined by Griffiths, O'Callaghan, and Roach, centers on the idea of facilitating unhindered trade and commerce across state borders. The underlying assumption is that increased economic interdependence between nations reduces the likelihood of resorting to armed conflicts and raises the cost of doing so, thus promoting peace and stability on a global scale.

Free trade is characterized by the unrestricted exchange of goods and services between countries without the imposition of barriers such as tariffs, duties, or quotas. It operates on the principle of comparative advantage, enabling nations to focus on their strengths and increase economic output, consequently fostering income growth for their citizens. The norms governing free trade, as outlined by Allen Sens, encompass reduction of tariffs, non-discrimination, national treatment, reciprocity, and exemptions, which must be adhered to by all parties to the agreement.

Trade agreements play a crucial role in implementing commercial liberalism. Such agreements, whether bilateral or multilateral, serve to promote trade liberalization and facilitate economic cooperation among participating nations. Platforms like Asia-Pacific Economic Cooperation and Pacific Islands Forum provide avenues for states to pursue their goals of reducing trade barriers and enhancing economic interdependence.

A notable recent example is the UK-PNG Trade Continuity Agreement, which ensures that British businesses and consumers continue to benefit from trading arrangements with PNG after the UK's departure from the EU. This agreement eliminates all tariffs on goods imported from PNG into the UK and gradually removes around 80% of tariffs on British exports to PNG. The agreement has particular benefits for PNG's palm oil and tuna industries.

The essence of commercial liberalism lies in understanding the concepts of interdependence and free trade. By reducing tariffs on imports, nations can lower the unit costs of goods, making them more affordable for consumers. For instance, the removal of tariffs on British canned meat imports could result in reduced prices, benefiting consumers in PNG.

To concluded, Commercial liberalism stands as one of the vital branches of liberal internationalism, championing free trade and economic interdependence among nations. By embracing this approach, countries can foster peace, prosperity, and cooperation on a global scale. Trade agreements, driven by the principles of commercial liberalism, create opportunities for nations to benefit from their competitive advantages and establish mutually beneficial partnerships. As we continue to explore the various types of liberalism, it is essential to appreciate the significance of commercial liberalism in shaping international relations and promoting economic growth worldwide.

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