The Free Trade Act is to remove barriers between countries such as tariffs, quotas and subsidies so that prices rise naturally through supply and demand. In the theory of Free Trade, it is a wonderful idea for developed countries to have better access to financial markets, to move labor and workers, and capital for free without the burden of taxes. Free trade is a hot topic among many people around the world. In theory, free trade sounds great. It turned out though that he did a lot of damage. If all the countries that participated in free trade went through the rules and there was no corruption then there would be no problem.
One of the biggest problems with Free Trade among many in the United States is that so much of our manufacturing has left our country in developing countries. These companies do this because of the cheaper labor found in these countries. Also manufacturing in the western world cannot compete with the wages and prices of goods from these third world markets. Those markets are constantly cutting their prices again and again to continue to remain competitive. The performance of the West cannot match this as the wages in the West are much higher and the cost of goods thinking.
The World Trade Organization plays a very important role in issuing trade rules. Free Trade was launched because the choice of global resources was largely controlled. They stand to benefit most from trade. The developing countries, endowed with natural wealth which, under trade, must thrive, are actually still second or third world. All the wealth generated from it is presented to the richest. By keeping the poor, when they should also benefit from it.
An example of developing competing goals is China United. Many US manufacturing plants have moved to China to remain competitive. This is costing many Americans their jobs and there way of life. It has left many who start from injury late in life. There are many reasons why these companies do this. Free trade is a major reason. China has a huge trade surplus. China artificially keeps its currency undervalued so that its goods are cheaper. This makes them compete with American goods. United States is overwhelmed with Chinese goods because of it. Americans love to pay less especially in these economic times. However, if the Chinese were allowed to recognize the yuan, they would no longer be able to compete with American goods. That would start to bring back the trade surplus and start selling more American goods. There are some who want to punish the Chinese for their trading practices, but the question is whether the government has the power. Others say tariffs are the answer. We could build a wall by giving up so-called, and we used to stop the wrong way. It’s clear though. It hurts US goods.
All in all the theory of Free Trade could indeed be good, but even with the best ideas there are always ways to corrupt it. The real answer is self-regulation. It is necessary to identify exactly what is harming our economy and think about our good before we sell the internet.
- www.onemint.com/2009/01/26/how-does-china-manipulate-its-currency/
- www.stopftaa.org
- www.greenpeace.org
