Attention to the Aussies: Free trade benefits EVERYONE!
August 04, 2004 ~ 11:48 p.m.
I recently had an argument with an Australian on-line friend of mine about the Free Trade Agreement (FTA) between Australia and the U.S. Although there is nervousness and suspicion in Australia over the FTA, echoing much of the same angst that Americans themselves felt during the heady days of the 1993/94 NAFTA debates�during which time I stood solidly behind Ross Perot, the ultimate anti-NAFTA hellraiser�I think now, as a convert to free trade ideology, that Australians who oppose the free trade agreement are wrong to feel that their smaller economy can�t compete. Free trade uplifts smaller economies; it is not simply about the �big boys.�
The following is what I wrote my Aussie friend, in an attempt to educate him about the true nature of free trade:
If free trade between nations did not exist, then economies would stagnate. You cannot impose tariffs without costs rising for consumers. Sure, the Greens and other assorted grab-bag Lefties love a policy like that as they are opposed to a consumer culture. Well, sorry, but it�s capitalism, innovation and entrepreneurship that drive a nation�s economy, and free trade, which allows nations to flourish at what goods and/or services they excel at providing, fits into this scenario like a hand to a glove.And Australia, isolated enough to begin with just given its geographical position, can ill afford a protectionist policy. Don�t tell me that there aren�t a plethora of products already on the Australian market from China. Any thoughts on that? Free trade with America will give Australian consumers more, and cheaper, choices.
And by cheaper, I don�t necessarily mean as a result of using cheap labor, though it�s no doubt true to an extent. But usually, what we define as �cheap labor� is simply a wage that we can�t imagine living on but which suits the worker in a poorer country. For instance, I couldn�t live on a wage of U.S. $5.50 per hour, but a Mexican worker could. If NAFTA hasn�t propelled Mexico into first-world status, that�s hardly the fault of free trade.
* Mexico has no unemployment insurance and no social assistance (what we call �welfare.�) Socialized medicine does not exist. Only those who work for the government or a private company which is registered with the national system (IMSS) have any pension, about one-third of the economically active population. The ability to provide social programs has been limited by the structural adjustment programs imposed on Mexico by the World Bank and the International Monetary Fund and supported by the Mexican political and economic elite * (how is this solely a point of blame for America?).
Perhaps your amigo en Mexico should consider the inequities and inefficiencies of his government, as I pointed out It�s far too easy to point the finger of blame at free trade. Far too easy.
Consider, if you will, if America adopted a protectionist policy and had no interest in trading with Australia. Then we�d have a reputation for being a nation of nativist thugs, interested only in ourselves, proponents of a sure-to-be-mocked America First policy. Look at how the European Union squawked when Bush threatened them with steel tariffs, which he was wrong to do. So what do you prefer�an isolationist, nativist America or one that is willing to open its markets to anyone willing to take advantage of them, and reap advantages in return?
And give your government some credit. Do you honestly believe that the Australian leaders are going to let us devious, imperialist Americans trounce your copyright laws? They might have �sold out� on Iraq, but surely they�re not so stupid as to accept piracy as part of any FTA. Piracy violates free trade; it is not a platform on which free trade operates.
I have provided two links, which I dearly hope you�ll read with an open mind. The first is from the libertarian Cato Institute. The second is from an American economics professor, and though his article is slanted toward what benefits the American economy, the same argument can be applied to any nation�s economy.
You too, dear reader, can check the links out:
And here
* Taken from �Who Benefits from the Free Trade Agreements?� by John W. Warnock.
� M.E.M.
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Copyright � 2001-2007 by M.E. Manning. All material is written by me, unless explicitly stated otherwise by use of footnotes or bylines. Do not copy or redistribute without my permission.
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