What Is Free Trade
Free trade was proclaimed as the ability to trade goods and services without barriers, and for prices to rise naturally through supply and demand. Proposed by many governments to be beneficial to all, the reality is very different.
Free trade, not to be confused with ‘Fair trade’ is one of the single most emotive subjects of our times. Pushed by governments and leaders of the western world over the last 60 years or so, to be beneficial to all, in fact, the rich get richer and the poor, very definitely get poorer.
Free Trade Features
Free trade implies the following:
- The ability to trade goods without barriers, for example taxes or tariffs, quotas or subsidies
- The ability to trade services without barriers or taxes
- No more policies which distort the trade, giving one company an unfair advantage over another
- Free access to trading markets
- Free access to the market information
- Free movement of labor and workers within and between countries
- Free movement of capitol within and between countries
Free Trade in Theory
In theory, free trade was heralded as a way to break down the barriers between countries, banishing taxes and allowing prices to be naturally set through ‘supply and demand’, and giving the opportunity for poorer countries to specialize in the production of goods which are appropriate to their environment e.g. coffee, cocoa beans etc with the capacity to sell these goods to the western world and be able to buy back the goods which they maybe do not have the ability to produce in their home countries.
Free Trade in Reality
In reality, the only people who really stand to benefit from free trade are the global elite, controlling international trade and seeking to control the entire world. Countries which were rich in natural resources, for example African and Arab nations with diamonds and oil, actually developed at a much slower rate than the nations who did not have such a commodity.
In reality, it has also meant that previously profitable and successful manufacturing in the western world has been unable to compete with the sweatshop wages paid in Asia and other places, and that the workers in these sweatshops must consistently cut their prices in order to be competitive in the world market. So what happens – industry and manufacturing declines in many countries as the markets are flooded with cheap imitations from exploited workers. It’s human nature to shop in the cheapest stores and to buy the cheapest goods without a thought for the actual slave labor which was used to produce such goods.
Trying to save a buck here and there is important, especially in these extremely difficult economic times when we’re all just trying to survive, but it’s important to spare a thought for the thousands of workers squatting in sweat shops around the world, and barely earning enough to eat or feed their families. What’s good about that?
