Chinese consumers queue for GE-Free produce and information being distributed by Greenpeace at a Guangzhou supermarket.
What is free trade?
The act of opening up economies is known as "free trade" or
"trade liberalisation." It usually benefits the larger, wealthier
countries whose big companies are looking to expand and sell their
goods abroad. In the one sector where developing countries have the
most to gain - agricultural goods - wealthier countries maintain
the highest level of "protection" of their own markets.
Globalisation has made the world a much smaller place. Global
trade refers to the act of buying and selling goods and services
between countries. Today these goods and services can travel
further and faster so that - for instance - products from all over
the world can be found at your corner shop. This can be anything
from fruits and vegetables, to cars, banking services, clothing,
and bottled water.
The scale and pace of this kind of trade has only increased over
time, and has become a very powerful tool. International trade is
considered a prime driver of how well a country develops, and
affects very much how well the economies of different countries are
doing.
Free Trade - who is paying the
price
The act of opening up economies is known as "free trade" or
"trade liberalisation." Trade liberalisation means opening up
markets by bringing down trade barriers such as tariffs. Doing this
allows goods and services from everywhere to compete with domestic
products and services.
But in practice the set-up of global trade rules and the way
these are administered by the World Trade Organisation, works best
for those countries who are already rich, and increases the gap
between them and poorer countries who are already struggling to
compete.
When trade is a weapon - tariffs and
subsidies
Part of the problem is that trade is not always equal. It is not
just a tool - it can also be a weapon. When countries put
restrictions, such as tariffs, on goods from other countries,
imported goods become more expensive and less competitive than
goods from their own country.
Another thing that can be done is subsidising domestic
businesses. This means that governments give money or other forms
of support to local or domestic businesses, to make sure that they
are cheaper over imported products and services. This can allow
unsuccessful and inefficient businesses to do well, since they
receive all kinds of government support. And while these businesses
continue to grow, smaller or local producers, especially in many
poorer countries - those that need support the most - are being
destroyed.
Any measure like this is called "protectionist," since it has
the effect of closing off a country's markets to goods from other
countries. Many wealthy countries in Europe, as well as the US and
Japan use these tactics to support their own domestic economies,
making it impossible for smaller, or less developed countries to
gain a foothold in the global marketplace.
As they go about protecting and closing off their own markets,
many of these very same countries are creating double standards, by
forcing other countries to open up their markets.