If the answer is yes, the assertion is that the concept of free trade is a gimmick or an unfair scenario. If a nation has more flexibility through trade agreements, and that nation also offers more subsidies to its exporters; other nations that may not be able to offer their businesses equal aid, will not be able to participate in true “free trade”. Countries like China and the US wield great power when it comes to trade. Smaller, less developed nations simply do not have the resources or revenue to offer their MNC’s loans, subsidies and support on the same scale as “superpower” nations do.
The other side of the argument, the no side, states that each country has the inherent opportunity to take advantage of free trade agreements, and to offer aid to businesses. If a nation doesn’t have the means to do so, they are not impeded by international trade laws, but rather their own fiscal shortcomings.
One word comes to mind; China. Is our trade relationship with China an example of free trade, or is it a situation that should be one of the most talked about topics in Washington DC?
The US has an outsourcing problem, and this problem is at the core of the argument about free trade with China. Our free trade relationship is extraordinarily one-sided, with China exporting much more in goods to the US, than it imports. In 2001, China was accepted as a member of the World Trade Organization. Between the years of 2001 and 2006, an average of 353,000 US jobs were lost to China; mostly manufacturing positions. (Scott, 2007) When China trades internationally, other nations lose.
China is not solely to blame for this trade imbalance. The US has been for decades borrowing money from China to pay for wars and entitlement programs, and when the great recession of 2008 hit home, and then spread worldwide; this pattern of borrowing and begging continued unabashedly. Although the US economy seems to be
Cited: Scott, R. E. (2007). Costly Trade With China. Washington DC: Econnomic Policy Institute.