What is Free Trade???????

Question

I read "Confessions of an Economic Hit Man" by John Perkins for AP World History and I have to answer this question. But I have NO clue what free trade is. People have tried to explain it to me but I still don't understand. Use Layman's terms please

Heres the question: As seen through the book, what has been the impact of "Free Trade" on both World and Developing countries. Use specific examples from the book.

Answer 1

Free trade basically means everyone is free to trade whatever they want and can sell it for however much/little they want without regulation by the government (certain exceptions such as narcotics of course apply).

Basically it means I can take my field of corn and sell it to anyone in the world I want for whatever price I think I can get out of it, and the government can't regulate how much I sell it for. I could sell it to you for $5 and to your parents for $100000.

Answer 2

free trade as it is used today is an almost fanatical belief that there should be no restraints to trades such as tariffs between countries or trying to protect a country's home industries and labor force etc....It used to be that countries when viewing trade where aware of the impact it would have on their own industries and would not allow for example a bunch of cheap steel to come into their countries from foreign destinations to undercut their steel industry etc..  Why did countries do that?  because they wanted to keep their industries alive and their work force working and their own economies thriving...which is all logical.

Then came the belief that borders should not exist...that its a global economy and companies should be greater than nations and be allowed to go sell their goods anywhere they wanted, and find the cheapest labor from the poorest places on earth...which all meant more profits for the large companies who are preequipped to do so.

Cheap labor means goods can be produced at less cost say in india and sold back here in the USA for the same price as before but more profits.  But also, these large companies now have access to huge markets in the third world or underdeveloped countries in places such as china and india........and have no restrictions in going there putting up a factory and selling their goods to all those millions of people.  This again puts the large multinational company in the advantage and they can control those new emerging markets ...meaning more profits.

So who wins   who loses???  the previous developed countries work force such as in the USA loses, because their jobs get shifted to other countries.  So there is a decline in standard of living.  The economy becomes more unhealthy as opportunities are not there as there were before when everyone who graduated high school could always get a job at a local factory and have a family and a good life.    

The winners are clearly the large corporations who have more markets and cheaper labor and more profits.  The underdeveloped countries get a boost to their economies because they now have a more thriving economy and soon a growing middle class.

The essence of this free trade ideology is what I called the corporatist mentality.....that corporations rule....they are more important than citizens and even countries...and that what is good for corporations is good for everyone else.  All this is not true of course, but this is what the true believers in "free trade" believe.  They have no problems with mexican truck drivers driving their trucks deep into the USA.  They have no problem with illegal aliens....its just cheap labor to them.  IN fact, they would like to set it up where any mexican who wants to come work in the USA gets a swipe card and can go across the border no questions asked......more cheap labor and more profits.

In the free trader's mind it is ok to have a free trade agreement with brutal regimes such as china because morality right and wrong democracy and humanitarianism are quaint ideas.....profits and making money is king.  In their mind, isolating and not doing business with commnunism regimes is out the window and trying to convert them through capitalism is in..  Hey, but even if they dont get converted, at least they got the cheap labor and access to those millions of eager new consumers.  I heard on the radio the other how mcdonalds and many other american companies are eager to open new stores in china.  this is the other shoe dropping in free trade....first the cheap labor, and then the huge new markets..

Answer 3

Free trade - Wikipedia, the free encyclopedia

Free trade is a system in which the trade of goods and services between or within countries flows unhindered by government-imposed restrictions

http://en.wikipedia.org/wiki/Free_trade

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Free trade has served to enrich the world's wealthy elite while impoverishing the people of the developing (more apporpriately called third-world) nations of the world.

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Here's an article that explains it all fairly well in a concise manner:

Mystery: How Wealth Creates Poverty in the World

By Michael Parenti

02/17/07

There is a “mystery” we must explain: How is it that as corporate investments and foreign aid and international loans to poor countries have increased dramatically throughout the world over the last half century, so has poverty? The number of people living in poverty is growing at a faster rate than the world’s population. What do we make of this?

http://www.informationclearinghouse.info...

Answer 4

Free trade is trading between countries without any duties,  tarriffs, or legislation from the governments. Poorer nations usually benefit becasue of the lower cost of trading with other countries.  

Answer 5

what is basic news?????  look up the  website www.stir.com.au its a 40hr website it wil explain free trade