Free Trade: is it evil?

[spudtater]

'Americans swarm to anything that's free--both literally and rhetorically--so corporate PR departments naturally employ rhetoric like "free trade" and "free markets" to advance their agendas. But it's a mystery why opponents of trade agreements that elevate corporate interests above democracy concede the terms of debate by calling for "fair trade, not free trade."

International trade agreements erect trade barriers as often as they remove them. As Wayne Andreas, CEO of agribusiness giant Archer Daniels Midland, said, "There is not one grain of anything in the world that is sold in the free market. Not one. The only place you see a free market is in the speeches of politicians." Well acquainted with both illegal price fixing and legally wielding political power to extract taxpayer subsidies, Andreas knows of what he speaks.'
      — ReclaimDemocracy.org: 'Stop Calling it "Free Trade!"'

It is starting to grate with me that free trade is being vilified. I think that free trade is just as politically important as fair trade, or even more so. I mean, it's all very well saying that buying european-grown sugar results in more money going to the producer, but is it morally right if the very same product was made affordable due to government subsidies supporting it, and its african competitors being taxed?

More articles:

• Oxfam: 'The Issues: Free Trade' — An easy introduction for children, or those with short attent oh look shiny!
• BBC News: 'The argument for free trade' — More in defence of free trade; economic and environmental arguments.
• Wikipedia article: 'Protectionism' — The antithesis of free trade.

Comments

[sigmonster.livejournal.com]

Yes, but...

Free trade without robust and widely accepted regulation on both sides of a border (weights and measures, just for a start) is a complete non-starter. Also, free trade without established trading networks on both sides of a border tends not to work very well, and the West spent many decades destroying such networks in Africa (yes, I suffer colonial guilt. So should you.). Also, there's a very large assymetry between the economy of Britain or France and the economy of, say, Botswana, and Botswana is well-off in terms of good governance and good structures (and in terms of kids not dying, too, except for the impact of HIV). Being a follower of Adam Smith does not mean immediately opening that border in both directions, it means opening it in one direction first, with a transition period before requiring the same in the other direction.

(Just for kicks, name a G8 member that hasn't benefited from 50 years or more of such an assymetry; tariff barriers, intellectual property, foriegn ownership restrictions, or all three. I'm prepared to wait some time...)

Free trade makes people rich, opens options, and creates choice. It's an amazaingly powerful thing. Powerful things can also kill people, and right now fair trade beats free trade as a priority for me, not least because there's this amazing thing called the WTO. (Yes, it's flawed in many ways. But would Bush have made noises about losing cotton subsidies if Brazil hadn't just won a major WTO ruling on cotton subsidies? Somehow, I don't think so.)

I seem to have rambled at length - I do apologise. I shall leave you with this:

40. To no one will we sell, to no one will we refuse or delay, right or justice.

41. All merchants shall have safe and secure exit from England, and entry to England, with the right to tarry there and to move about as well by land as by water, for buying and selling by the ancient and right customs, quit from all evil tolls, except (in time of war) such merchants as are of the land at war with us.

- The Great Charter

[spudtater.livejournal.com]

I'm a little confused by this comment. Are you defending assymetric trade or not?

[sigmonster.livejournal.com]

I am, with the provisos that over time trade barriers should tend to come down, and better-off economies have a moral duty *not* to be protectionist, a moral duty on the same order as free and open justice systems (which isthe point of the last quote).

[xquiq.livejournal.com]

I don't think opening the borders and simply allowing free trade would work at the moment, or is desirable.

From an economic perspective, is it 'right' to be protectionist about food production? Perhaps not.

From a common sense perspective, is it sensible to safeguard the means of food production in populous Europe in order to ensure that we don't have over-reliance on other nations for the one thing we can't do without? I'd say yes.

The free market without imperfections does not and never will exist.

There are environmental arguments both for and against free trade. The free market doesn't care about the environment in the long term and certainly doesn't care about food miles. Should we subsidise local production for the sake of the environment? Maybe. Perhaps it's a shame that Pigouvian taxes don't really work on a large scale.

We should stop dumping and we should certainly stop forcing poor countries to accept ridiculously one-sided trade agreements because the IMF / World Bank give them no choice. As for completely free trade, it's a nice idea, but I don't think it's right for now. It's too risky and I would worry about markets if it were flung wide open to free trade without a period of adjustment.

[spudtater.livejournal.com]

I must admit I am just dipping my toes into the world of economics. (Recommendations of good introductory books would be appreciated.)

> we should certainly stop forcing poor countries to accept ridiculously one-sided trade agreements

It seems so to me. After all, if one country is able to impose import taxes and subsidies, then surely all countries should?