Who Benefits From Free Trade
Many believe that there are lots of countries and people in the world who benefit from free trade, but those benefits are definitely a double edged sword.
There are few political and humanitarian topics which can evoke such strong feelings as free trade. Free trade has plenty of supporters, who will argue emphatically that it is the only possible way to exist in a capitalist society, survival of the fittest and all that, with no economic barriers between countries, basically a bit of a free for all. The strongest will survive and the weak should shut up shop and do something else, instead of relying on state hand-outs or artificially inflated and subsidized prices. They will argue that free trade is beneficial to all, but is that really the case?
Benefits from Free Trade – Manufacturers
Theoretically, by opening up the market place for manufacturers you are putting them on an even keel with the competition; you are opening up the borders so that they have the ability to export their manufactured goods to other parts of the world without the restraints of taxes or other tariffs. Of course, you are also opening up the borders for import from other countries where manufacturing costs may be much lower than in their own country. Swings and roundabouts maybe? Survival of the fittest?
Problem – how can a manufacturer in a country which prides itself as having a high standard of human rights issues and a minimum wage, possibly compete with a country where slave labor is used to keep costs down? How many people in the U.S. would be willing to work for wages which could only buy a bowl of rice per day? The smaller individual companies are thrown to the dogs, while the large corporations re-locate to the countries where labor is cheap!
Benefits from Free Trade – Consumers
Oh, the consumer, what a contradictory bunch they are. On the one hand up in arms about the poverty in third world countries and children being forced to work in sweatshops for 14 hours a day, just to earn enough money to buy food, and on the other, pleased as punch because they’ve managed to buy new shoes for a fraction of the usual price they pay. Wonder who made the shoes?
Fact – it’s a well known fact that people lie. They do, loads of them, every day, in case they make themselves look uncaring, uneducated or just stupid. They even lie in anonymous surveys, how crazy is that?
“I believe in supporting our own country and our workforce.”
“But you drive a Japanese car.”
“I know, I couldn’t afford any other, I saved $5,000 on this deal, and it has loads of great extras!”
Need we say more?
Benefits from Free Trade – Specialist Producers
The idea that free trade is beneficial to many specialist producers around the world is a popular one, that countries can concentrate on their core products, coffee, cocoa, etc, and supply the rest of the world at a fair price. Only problem is, that these countries are very often held to ransom over these agreements, they’re a little short on bargaining power whenever there’s a fly in the ointment – in free trade all partners are created equal – but some are definitely more equal than others.
