Political Crossfire Forums

[Crazy_Canuck]

What does it mean to you?

Do you think it's a good idea?

Discuss :-)

[Crazy_Canuck]

Hmm...
Well let me start off then.

I think free tade means that there's no political intervention in the movement of goods across borders. I think it's a good idea, in that it will lead to the interdependability of nations and would do much to reduce the likelyhood of wars and would promote the spread of ideas.

However, the way it's being pushed right now, in the form of globalization isn't very useful. It's leading to the domination of markets by a handful of companies and no one actually follows the concepts of free trade anyway. Take for instance the bigget pro-capitalism, and by extension free trade/globalization, nation on the planet, the USA. US markets are very well protected from competition when it suits them, but when they get disadvantaged by protectionist policies of other countries they are the first to cry for free trade.

This sort of thing happens all the time. So, should governments even bother with free trade at all? Or should they just adopt a policy of 'my country first' and IF trade with other countries is possible consider it a bonus?

[D@N]

it means corporate monopolization of entire regions forcing workers into disgusting conditions for very small wages that don't cover there basic needs. It means 6 year old children working 12 hour shifts with their parents because they can't afford an education or to just stay home. Free trade means that workers in North America lose jobs because the companies would rather pay 1/50 the wage to someone in Latin America.

thats what I got off the top of my head.

[cap'n queasy]

Actual free trade is good. What is called Free Trade or globalization is what you describe. It's designed to remove competition multi-national corporations.

[Classically Liberal]

Quote: Take for instance the bigget pro-capitalism, and by extension free trade/globalization, nation on the planet, the USA.

I do not think this is accurate. Many other countries are more pro-trade than the United States...just one of them being Sweden.


Quote: it means corporate monopolization of entire regions forcing workers into disgusting conditions for very small wages that don't cover there basic needs. It means 6 year old children working 12 hour shifts with their parents because they can't afford an education or to just stay home. Free trade means that workers in North America lose jobs because the companies would rather pay 1/50 the wage to someone in Latin America.

I think you greatly overstate, but your under lying point that trade is currently run for the benefit of corporations is true. But, almost no government on this earth will step up to corporate socialism, or the international organizations that rig the system for them.

Therefore, I do not think corporate regionalism is a good thing. However, the ability for countries to exchange their goods and services freely, without interference from a government of an internatinal organization, is a great thing.

[Crazy_Canuck]

Classically Liberal wrote: Quote: Take for instance the bigget pro-capitalism, and by extension free trade/globalization, nation on the planet, the USA.

I do not think this is accurate. Many other countries are more pro-trade than the United States...just one of them being Sweden.


Quote: it means corporate monopolization of entire regions forcing workers into disgusting conditions for very small wages that don't cover there basic needs. It means 6 year old children working 12 hour shifts with their parents because they can't afford an education or to just stay home. Free trade means that workers in North America lose jobs because the companies would rather pay 1/50 the wage to someone in Latin America.

I think you greatly overstate, but your under lying point that trade is currently run for the benefit of corporations is true. But, almost no government on this earth will step up to corporate socialism, or the international organizations that rig the system for them.

Therefore, I do not think corporate regionalism is a good thing. However, the ability for countries to exchange their goods and services freely, without interference from a government of an internatinal organization, is a great thing.

How do you reconcile Swedens socialist government witht he statement that it is pro-trade. Since a social philosophy puts the needs of the people above the needs of commerce?

How would you construct a free trade agrement that prevent/combat corporate regionalism?

[Classically Liberal]

Quote: How do you reconcile Swedens socialist government witht he statement that it is pro-trade. Since a social philosophy puts the needs of the people above the needs of commerce?

How would you construct a free trade agrement that prevent/combat corporate regionalism?

Sweden is contradictory in that manner, but they are far more dependant on trade that we are. They, for all intents and purposes, have/advocate freer trade policies than the United States.

I will discuss regionalism later, I got work to do.

[Eonve]

Crazy_Canuck wrote: I think free tade means that there's no political intervention in the movement of goods across borders. I think it's a good idea, in that it will lead to the interdependability of nations and would do much to reduce the likelyhood of wars and would promote the spread of ideas.

i would also add free movement of capital and services.

Quote: However, the way it's being pushed right now, in the form of globalization isn't very useful. It's leading to the domination of markets by a handful of companies and no one actually follows the concepts of free trade anyway. Take for instance the bigget pro-capitalism, and by extension free trade/globalization, nation on the planet, the USA. US markets are very well protected from competition when it suits them, but when they get disadvantaged by protectionist policies of other countries they are the first to cry for free trade.

free trade always leads to economic interdependence and hence to what you call globalization. the problem is that you, as many other people have a misconception about the current state of free trade. even if we take your example, the USA, it becomes very evident that your statements is false:

1. here is briefly summarized case study of limits of the government's ability to protect internal market. steel tariffs. when Bush tried to increase them without any substantive reason, the EU has filed a complaint through the WTO and the US was forced to lower the tariffs to the original levels.

2. here is another trend that points out to the different conclusions than the ones you have reached. trade deficit. if US is so good at protecting the internal market and disadvantaging other countries in trade, then why does it have a HUGE trade deficit, particularly with Asian countries like Japan and China? cars, textiles, consumer electronics, high-tech industries - why is it not protecting them when the outsourcing the jobs seems to bring so many social problems and discontent at home?

so why don't you give us some specific examples that would support your argument. it is quite easy to talk about something general that you think exists, but why don't you try to tie it down to reality that provides a pretty good check on all kinds of theories.

Quote: This sort of thing happens all the time. So, should governments even bother with free trade at all? Or should they just adopt a policy of 'my country first' and IF trade with other countries is possible consider it a bonus?

they have tried to adopt the kind of "my country first" policies that you are talking about. it happened in 1920s-1930s. and guess what, they have led to the worst recession ever, followed by the establishment of fascist regimes all over the Europe and WW II. do you want to try that again.

and another case in point. Japan has pursued rather protectionist policies for the second half of the 20th century, accumulating tremendous trade surplus over the years. however, in the 1990s it has faced a huge, decade-long recession from which it still did not completely recover. even up to this day its economy is stagnating.

[Crazy_Canuck]

Enove.

1) Softwood lumber. Canadian lumber companies were hit with tarrifs when exporting lumber to the US. The US government lost a couple cases before NAFTA and one at the WTO. Yet, to this day the tarrif stands and the 3 billion collected by the US government is slated to be given to American firms as of this post. This is one well documented example of protectionist policies that shut down fee trade. Another example I would give is the massive subsidies given to American (and it holds true for all western nations) farmers. Clearly an agricultural based economy, like those which domiante the third world, would be better at producing food goods, yet tarrifs and restrictions keep the only real good those nations can produce from the market.

2) As a caveat I said "when it suits them." I'm not even going to speculate as to why this occurs, but it does.

3) Didn't protectionist policies come in response to the global recession?

4) As I understand it Japan had a very well co-ordinated economy. Companies worked together with help from the government to better advance their technology, manufacturing facilities and to develop export markets. However, once the companies reached a certain size they began to actively persue their own interests instead of staying well co-ordinated.

[Eonve]

Crazy_Canuck wrote: Enove.

it's Eonve, actually. and it does have a meaning. it's not just a random word i chose.

Quote: 1) Softwood lumber. Canadian lumber companies were hit with tarrifs when exporting lumber to the US. The US government lost a couple cases before NAFTA and one at the WTO. Yet, to this day the tarrif stands and the 3 billion collected by the US government is slated to be given to American firms as of this post. This is one well documented example of protectionist policies that shut down fee trade. Another example I would give is the massive subsidies given to American (and it holds true for all western nations) farmers. Clearly an agricultural based economy, like those which domiante the third world, would be better at producing food goods, yet tarrifs and restrictions keep the only real good those nations can produce from the market.

i am not aware of this case. but i will make sure to look into it. could you, please, inform me on when was the tariff enacted.

Quote: 2) As a caveat I said "when it suits them." I'm not even going to speculate as to why this occurs, but it does.

too bad that you are not going to. i find this to be one of the most interesting topic in the international relations theory.

Quote: 3) Didn't protectionist policies come in response to the global recession?

no. they were practiced both before and after the depression. they have caused it and in certain ways reinforced it. only WW II and post-war liberal economic order have managed to cure the problem and thus avert another crisis.

Quote: 4) As I understand it Japan had a very well co-ordinated economy. Companies worked together with help from the government to better advance their technology, manufacturing facilities and to develop export markets. However, once the companies reached a certain size they began to actively persue their own interests instead of staying well co-ordinated.

so? they had a deep decade-long recession and their economy is still not growing even though they have very protectionist policies. would not that be the sign that protectionism does not work. Japan has a huge trade proficit and it's stagnating. US has a huge deficit, and it is still growing. China is following in Japan's footstpes by the way. by refusing to depreciate their currency and open markets to the foreign goods they are accumulating trade proficit, but it due time it will come around and hit them back. Japan was growing at amazing rates before, and yet, where is it now? the same will most likely happen to China in a decade or two. or may be even earlier.

[Crazy_Canuck]

Sorry, Eonve

Here's the link to the softwood lumber dispute:
http://www.for.gov.bc.ca/HET/Softwood/

Still no deal though.

I'd attribute the Japanese situation to more than protectionist policies.
What are they protecting?

The Chinese are using the Japanese model, but I think they would have payed close attention to the Japanese in order to not repeat the same mistakes.

Could you explain, "by refusing to depreciate their currency and open markets to the foreign goods they are accumulating trade proficit, but it due time it will come around and hit them back."

Their currency is already lower than the US dollar isn't it?
What foreign goods do they require?

[Eonve]

Crazy_Canuck wrote: Sorry, Eonve

Here's the link to the softwood lumber dispute:
http://www.for.gov.bc.ca/HET/Softwood/

i will make sure to look into it. but even if your description of the trade dispute is correct, there is still no way to conclude that free trade as it is now is bad. while it is certainly not perfect, as nothing is, it is nevertheless beneficial for all the participants involved.


Quote: I'd attribute the Japanese situation to more than protectionist policies.
What are they protecting?

their economy, jobs, social patterns and traditions, etc. ever heard of such thing as cross-shareholding? all the major companies are tied together and are protecting each other. even without laws that explicitly proctect the industry, there is effectively very little competition. a car-producer would buy metal only from the steel company in which it owns stocks and the steel company would in turn hold stock of the car-producer. the same goes for the rest of the production chain and all the other industries. that is why foreign companies have such a hard time getting access to japanese market and "competing" with japanese companies. due to this kind of policies, japan has accumulated huge trade surplus, but a lot of its companies have lost the competitive abilities on the international market. the recession and stagnation have followed. there are many more of these reasons, but i gave you the part that pertains to the free trade vs. national interests.

if you have an alternative explanation, i would be more than happy to hear it.

Quote: The Chinese are using the Japanese model, but I think they would have payed close attention to the Japanese in order to not repeat the same mistakes.

i would say that Chinese way of doing things is very different from the Japanese. and their proficit results from a different set of reasons. their currency exchange rate is only one of them. but i can very well see how they can end up being where Japan has been in 90s even though they are now traveling along a different road.

Quote: Could you explain, "by refusing to depreciate their currency and open markets to the foreign goods they are accumulating trade proficit, but it due time it will come around and hit them back."

while it is true that trade proficit is a sign of competitiveness at the present moment, it still results from exclusion of foreign competition and thus will eventually hurt the economy.

also i made a mistake. i wrote that they should depreciate their currency, while i should have written that they should revaluate their currency and let it float freely, without fixed exchange rate and strict government control. by not letting yuan achieve its full value they are impeding the development and strengthening of the internal market. by staying "competitive" through low wages they are supressing the national consupmtion. and while it is ok for now, in future that might prove to be a rather dumb decision. they will not have anything to fall back upon in case of a crisis and this is not smart.

Quote: Their currency is already lower than the US dollar isn't it?
What foreign goods do they require?

yes, their currency is lower than USD. i think that it is 8.28 to a dollar. that is why they should let it float or at least revaluate it. it's way too low. i am sorry, i know that i made a mistake that probably has caused this question.

as for the foreign goods, i cannot tell you what exactly do they need as of this moment. i did not study specific industries to figure out the sick ones. but i am sure that if they had allowed a greater degree of economic freedom and self-regulation, there would be a huge change in their trade.