Introduction The value of free trade is a contentious issue with many prongs. There appear to be economic benefits in the short-term to most, and in the long-term, to all that participate, as well as disadvantages. However, the area in which free trade appears most valuable and virtuous is that of providing freedom of choice. Since no single individual can produce all the different goods they need to maintain their life and achieve happiness, all individuals should have the freedom to acquire their needs by means of trade with others.
This document aims to discuss relevant issues relating to the liberalisation of trade and how this could affect both Western economy (specifically the USA) and developing economies (in particular Brazil).
Protectionism Whist the Bush administration pushes forward and attempts to gain US Congress approval for Trade Promotion Authority, also known as fast track, a number of US industries dig their heels in at the looming FTAA and international trade agreements.
Steel manufacturers are concerned about how anti-dumping regulations (which penalise countries that export for less than production costs) will be affected by FTAA. Decisions on these regulations will have a direct impact on them.
Textiles and apparel industries have also expressed concern. China is able to flood the US market with their comparative advantage in the textile and clothing arena, leading to almost definite negative consequences on employment in the US sector of the market.
US Agriculture stands to be significantly affected. Whilst export commodities such as wheat, soybeans, corn, and cotton will increase for the US, there are negative implications the domestic distribution of sugar, peanuts and orange juice.
Technology advocates of protectionism argue that the United States is losing its technological edge to countries like Japan, mainly as a result of the U.S. dedication to free trade. These...