On the Fence Regarding Free Trade

On the Fence Regarding Free Trade

The benefits of trade agreements, bilateral or multilateral mutual interests are in some ways a foundational establishment of an agreed level playing field approach to trade where companies from two countries, as was the case with the FTA, can provide the incentives to preparing for a negotiated agreement where both parties will be ensured to walk away with some benefits or a win-win situation.

The movement to encourage negotiated trade agreements might be described as a legacy of market liberalization on the part of corporations who during the period of the early nineties and coinciding with the Clinton-era administration saw market-based global economics as a method to gain competitive advantage and extend tariff reductions globally. NAFTA further encouraged many companies from Asia for example to relocate portions of their assembly of manufacturing and production to the USA and Canada to meet but not eliminate net losses of blue-collar jobs.

Whether or not there is a loud sucking sound as Perot stated, Gore really got him on caricatures of Smoot and Hawley who enacted restrictive trade-based embargoes as an alternative which many economists describe as the real cause of the Great Depression so the dangers of free trade might better appear more like a steady drip. However it is difficult to imagine the net benefits available to manufacturing companies willing to locate in Mexico and the attendant impact upon unionized labour in the rest of North America.

Trade pacts like the EU and NAFTA facilitate an easing of trade processes and at the same time remind one of a reading of "The Lexus and the Olive Tree" by Tom Friedman where net economic benefits are seen as attendant to sovereignty issues in terms of limiting governmental legislations locally through the donning of a "golden straitjacket" which ultimately undermines government regulation of industry. Residents along the Rio Grande might be loathe to dip their toes in there as especially its American side are observant to environmental impacts of inter-regional under-regulated free trade.

Many economists of the humanistic perspective are beginning to question free trade which does not address sustainability and whether production standards, human labour rights or the general betterment of the world's poor are well served by free trade in commodities and money markets which are lately seen to claw back global trade gains in reduction of tariff barriers made since the late 1970s due to higher oil and commodities prices. These have caused significant inflation in many non-free trade zone protected nations and at the same time encouraged run-away growth in others providing many trading nations within free trade zones or not with "measurable economic growth within glass bowls" as Hernando DeSoto would describe trade regulated zones as existing in their own realm while the developing world surrounding grows and consumes wildly outside of statistical measures like the Big Mac index but more along the line of concrete and basic building materials exchanges where attendant unregulated growth may increase at rates fifteen to twenty times official GDP rates without services or tax gains. At the same time " The Wild West" is exactly what free trade appears to have under-capitalized.

Free trade is often more about minimizing risk for those within and excluding those without after all. What is actually really free about that? The EU at the same time has made a great stride in standardization of various regulations however the attendant lags in making agreements make it appear unwieldy in its scope and again undermining the net benefits as the WTO might at times appear as too many voices have yet grown the ability to listen and agree. At the same time free trade often represents the least of all evils as one might describe European/American global trade influences worldwide.