Why Free Trade?
May 20, 2017Posted by on
This week on Facebook: I returned to what is my fourth in a series¹·²·³ of articles on free trade. This week prompted by Monday’s article on a bank heist in Paraguay that made Oceans Eleven look like a walk in the park. This did however lead to some interesting articles the best of which — in my opinion — I’ve included this week. Interference by the State in the ability to trade and to use trade as an economic weapon amongst nations is not a new concept, historic caveats to trade are still used in notional free trade agreements.
Monday 15/5/2017 A bank heist in Paraguay’s ‘wild, wild west’ reveals the dark underbelly of free trade: The heist made headlines not for the relatively modest sum taken but for its dazzling Hollywood style. According to local papers, the team came armed with heavy weaponry and explosives, and 15 cars were set ablaze. The robbers escaped via speedboat, crossing lake Itaipú to reach Brazil. A private getaway plane was impounded by the authorities. This dramatic scene fits neatly with stereotypes about Ciudad del Este, a Paraguayan commercial hub in the notorious Triple Frontera area where Argentina, Brazil and Paraguay intersect. It is one of the most active border economies of the hemisphere, and Ciudad del Este is often portrayed as its lawless capital.
Wednesday 17/5/2017 It’s Time to Think for Yourself on Free Trade: The problem with the present trade regime is not that it sacrifices the political and the social for the economic; it is that it has never made much sense from the economic perspective, either. Which is why it’s a mistake to judge real-word trade agreements strictly on economic terms, rather than social or political ones.
Thursday 18/5/2017 Free Trade and Its Foes: A wave of protectionism that crimped economic growth led to the 1947 formation of the General Agreement on Tariffs and Trade, the precursor to the World Trade Organization. Most countries are now members of the global rule-setting body, with China joining in 2001.
Friday 19/5/2017 What Economists Got Wrong About Free Trade: Proponents of free trade argue that the decline of American manufacturing jobs isn’t the result of increased trade, but of a larger shift in the nation’s economy toward higher-skilled jobs. They also point out that the growth of wage inequality hasn’t corresponded perfectly with the expansion of global trade. At any rate, whatever their cause, the drawbacks of trade are regarded as not so severe that they can’t be overcome; it’s assumed that workers who find themselves in a region whose jobs are vulnerable to foreign competition could simply move and find a job somewhere else.