FREE TRADE PROBLEMS

by Anonymous 3:13 AM 0 COMMENTS

Often, you will hear a politician talk about how free trade is good for America. You must understand that they are not speaking of a traditional system of free trade, what they are actually speaking of is globalization. It is true that free trade is a good thing, especially in the classic sense. But, they are not speaking in the classic sense.

In the classic sense of free trade individuals, communities, states, and nations are allowed to exchange goods and services without the penalty of added taxation. Free trade between states and communities has helped America and other nations become prosperous. Also, free trade with like nations has benefited all.

What makes this work is that the free trade is occurring between communities, states, and nations with similar economic rules and circumstances. A worker in Wyoming does not make 1% of what a worker in California does, there is variation, but they are within the same economic realm. The labor laws and governmental regulations vary but are not drastically different. The same could be said for nations such as England and Canada. In such a system the free market is allowed to benefit all who work within the system.

Free trade does not work when both parties are playing by a very different set of rules. This is not really free trade this is globalization, a system in which western nations are forced to trade equally with nations that do not play by the same rules.

Think of globalization as a basketball game. America is only allowed to have three men on the floor; China is allowed to have seven men on the floor and they are not required to dribble the ball. Yes the Americans may be harder working and more skilled, but ultimately they will not be able to compete with a team that is not required to play by the same rules.

Let’s look which nations we should have unrestricted free trade agreements with:

China: NO NO NO!
Australia: Yes
India: No
The EU: Yes
Indonesia: No
Canada Yes
You get the point.

If you are the head of a large corporation and you have share holders demanding increased profits you would look at cutting costs and increasing income. You can either build a new factory in China that does not have to operate under the same costly restrictions or you can keep the Detroit factory that grows more expensive by the day. You can either hire a few hundred people in India to do your customer service for a few dollars a week, or a group of Americans at minimum wage or higher. If profit is your motivation, the answers are obvious.

With the savings from cheap labor and reduced operating expenses they make large campaign contributions to politicians, who will work to keep and expand the free trade agreements that made this possible. Meanwhile, these same politicians (many of them Marxists) seek to create more rules and regulations that send even more jobs to other nations, while claiming to do it for the little guy.

What is the solution? We need to elect politicians who will fight against globalization and crony capitalism. We need to get out of disastrous free trade agreements with nations that do not play by the same rules. If not, we will be forced to work for much less and see our standard of living continue to decrease.

I'm all for helping poor people in India and Brazil, but not at the expense of future generations of Americans. Free trade agreements should mutually benefit both nations, not drag another nation down to lift the other one. These unwise free trade agreements combined with government regulations, and unreasonable unions, are destroying western economies.