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Free Trade

In the wake of the WTO fiasco in Seattle, I though I would add a page discussing free trade and the issues raised by some of the WTO protesters.  Here are some brief thoughts on the issues of free trade and globalization.

The benefits of free trade are undeniable.  As far as I can tell, those who argue against free trade either don't understand basic principles of economics, or are trying to maintain the status quo in order to protect a narrow interest at the expense of the greater good.

The World Trade Organization (WTO) is merely a mechanism for nations to resolve trade disputes.  It doesn't have any power other than that which nations have chosen to give it.  It cannot force any nation to change its laws - it merely allows other nations to impose retaliatory tariffs in response to laws that are found to be protectionist.  Claims that it is some kind of "world government" or "undemocratic" are ridiculous. 

Protecting the environment is an extremely important goal, but it is in no way incompatible with free trade.  Environmental protection should be addressed through national laws and international agreements.  But protectionist trade policies should not be hidden in the guise of environmental regulations - such laws do not protect the environment, and it is these laws that have been found to be problematic by the WTO.  By bringing to light so-called environmental laws that are not protecting the environment, the WTO may actually be helping to improve environmental protection in the long run.

In addressing many of the issues concerning free trade and globalization, I find it useful to look at the United States, and the free trade that occurs across state lines within the U.S.  Would the people of the U.S. be better off if each state could impose tariffs on goods coming from other states?  Of course not.  It would introduce great inefficiencies and redundancies into the U.S. economy, and it would hinder economic growth.  The opponents of free trade have not provide any explanation of why, if trade barriers are such a great thing on the international level, why would they not also be a great on the national or local levels.  If having nations impose tariffs on foreign goods and services actually helps people, shouldn't we also encourage tariffs by states or provinces?  By cities? By individual neighborhoods? 
 


Please note that the views expressed in these pages are mine, and mine alone.  They do not necessarily reflect the views other members of my family, past or present employers, or any other person or group with which I have been affiliated.

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Last Updated 22 July 2005
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