The Adam Smith Institute
The Adam Smith Institute is the UK's leading innovator of free-market policies. Named after the great Scottish economist and author of The Wealth of Nations, its guiding principles are free markets and a free society. It researches practical ways to inject choice and competition into public services, extend personal freedom, reduce taxes, prune back regulation, and cut government waste.

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EU trade stance "perverse and immoral"
By Dr Madsen Pirie

The EU's trade policy is scorned by Alex Singleton of the Globalisation Institute in an article in The Business newspaper. At issue are the textile quotas by which inefficient domestic producers are protected from competition by producers in poor countries, and which force EU customers to pay higher prices.

The EU's stance is perverse and immoral and will hit the weakest and poorest hardest, both in Europe and in China; it shows that Brussels' supposed commitment to economic development and solving world poverty is utterly worthless. In theory, since 1 January, the world has enjoyed free trade in textiles, a welcome development. But the EU is still allowed to impose anti-Chinese quotas until the end of 2008 as part of the Textile Specific Safeguard Clause which China agreed to as part of its ascension to the World Trade Organization.

Some charities like to play God, deciding which favoured countries shall be allowed to sell how many goods in which chosen markets. But, as Alex points out, this is a recipe for keeping poor people poor. The charge that free trade would lead to 'a race to the bottom' has been shown wrong. In fact the Chinese are comparatively well paid; their success has come about because they invested in more efficient production.

Not surprisingly, EU trade commissioner Peter Mandelson comes in for some stick.

The European Commission has no business interfering in trade. Mandelson's ridiculous and destructive quotas have brought confusion to the marketplace and raised prices for consumers.

He should hang his head in shame, says Alex. Maybe so, but he should also rethink the whole sorry mess and make swift and decisive moves towards free trade.



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Adam Smith (1723-1790)
Adam Smith was the great Scottish philosopher and economist best known for "The Wealth of Nations", his pioneering book on free trade and market economics.

A wide selection of material about Adam Smith is now available on the Adam Smith website. This includes the full text of his two major works, The Theory of Moral Sentiments and The Wealth of Nations.