A couple of comments on the essay:
> 'Free trade' seems to mean that trade between countries occurs with no
> government regulation or restraint. Or, in other words, no
> quotas, licenses,
> taxes, safety concerns, inspections, or limits of any kind.
> Business people
> are free to do what they will in buying and selling products
> and services
> between countries.
This definition is fatally flawed. Free trade as the complete absence of
management of trade flows? This is nowhere practised and nowhere espoused
as desirable. It is not, as suggested, an ideal which free traders cannot
in fact reach, and for which they reluctantly settle on second-best
alternatives. The definition as per every trade regime I know is
non-discrimination by governments: you treat like goods from different
countries alike, and you treat like goods from foreigners and domestic
producers alike. The treatment thus resulting involves a huge number of
taxes, safety regulations, inspections and other limits, and these are seen
as acceptable and desirable.
The subsequent critique of laissez-faire (the "theoretical argument") is
therefore quite off the mark. And there are more theoretical arguments for
free trade than comparative advantage, which most trade economists now
regard as minimally significant. Most now focus on the dynamic gains from
trade, such as new technologies brought by investors, the efficiencies that
firms must create in facing foreign competition, etc.
This does not mean there are no problems with free trade, or current trade
rules. There are many. See our recently-posted environment and trade
handbook at http://iisd.ca/unep_handbook/ for a good summary of some of the
basic problems as they relate to sustainable development.
All the best,
Aaron Cosbey
*******************************
Aaron Cosbey
Interim Program Director
Trade and Sustainable Development Program
International Institute for Sustainable Development
Trade site: http://iisd.ca/trade
General site: http://iisd.ca
Calgary address:
2619 2nd Ave. NW
Calgary, Alberta Canada T2N 0H9
Tel: +1 (403) 270-2700; Fax: +1 (403) 270-2694
Email: [log in to unmask]; [log in to unmask]
Winnipeg address (IISD head office):
161 Portage Ave. E., 6th Floor
Winnipeg, Manitoba Canada R3B 0Y4
Tel: +1 (204) 958-7700; Fax: +1 (204) 958-7710
Email: [log in to unmask]
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
|