Can international trade ever be free and fair?
EU and US trade officials are meeting to renew efforts to resolve their differences, deepening a crisis in global free trade talks.
The US and Europe's failure to reach agreement on agriculture is the main sticking point that has delayed a new worldwide trade deal; the aim is to deliver a new global agreement on free trade by 2006.
Recent trade disputes between the EU, the US and China over textiles have highlighted the difficulties of enforcing global trade rules.
Have you been affected by trade disputes? Can there ever be free and fair trade in the global market place? How should the west react to the world's fastest growing economies? Can there be a global agreement on trade?
We discussed the issue of international trade on our global interactive programme Talking Point on Sunday, 25th September. Click on the link to watch the programme.
This debate is now closed. Read a selection of your comments below.
The following comments reflect the balance of opinion we have received so far:
The world will remain in barter using the strong currency that people trust. The trade war will continue as Germany has an election that has created a split in many trade areas. Iran and North Korea will stay defiant and upset the trade agreement not directly but there will always be in the minds of the negotiators. The UN oil; for food argument deepen the hole further. Will Mr Annan stay as he was or is there a dent in his name? When you study the jobless that is still created by many firms even now, the gap will be bigger. Means and methods of trade are changing daily. There will always be a gap between the haves and not haves.
Firozali A Mulla, Dar-Es-Salaam
Free trade in Australia is slowly being implemented. There is a great deal of hardship, but there is also a safety net. Over the past 15 years Australia and New Zealand have advanced financially but regressed socially. It seems like every time there is good news on the financial side, it only benefits the rich.
Bill Anderson, Perth, Australia
'Free trade' means lowering your costs to that of the emerging nations. The problem for the West is they have high social costs. Now if we were to eliminate the NHS, welfare benefits, pensions, social housing, free education then yes by all means lets all compete on a level playing field.
The principle of free trade is the same as the principle of communism. In theory it sounds great, but can never work effectively in practice. Global trading rules would rely on all countries having the same level of economy and consumer needs, something that hopefully will never happen or the world will have become very bland.
Roger Cope, Burton upon Trent, England
Genuine individual freedom is not possible without genuine free trade. When ordinary people have to seek permission from authorities to trade and when they have to see 75% of the wealth they create confiscated (through the cumulative effects of taxation) they are effectively economic slaves who get to change their tyrants through a voting system. The global group think acceptance of taxation and regulation will hamper the evolution of real democracy until it becomes discredited in the minds of the majority of people.
Paul Joseph, Kingston, Jamaica
I doubt very much whether there is any thing in the spare of human activity today that is free and fair considering the way and manner each country is sticking to their guns and national interests.
Ibrahim Tudu, Gusau, Zamfara State, Nigeria
Free trade is a fallacy! Even the biggest proponent of free trade, the US, only favours deals that advantage their own industry and usually to the detriment of some foreign countries local industry. In fact, in the 'free trade' free for all, there will be an amazing amount of immeasurable hardship in both industrialized and non industrialized countries as at the lowest and least measurable level of everyone's economies we will witness an extinction of independent small and medium size businesses. We will all suffer at the hands of a global elite that will control every facet of our lives. From media to water to food stuffs. I cannot see how we will collectively benefit from this.
The "levelled playing field" exists only in theory and to argue otherwise is to mislead people. The First World North holds much influence, and arguably, heavily dictates of world trade rounds. While they are quick to accuse and cry foul over developing countries over piracy, predatory prices and dumping to name a few, they are as equally guilty of subsidizing their agro exports and using sanitary and a range of unfair sanitary, packaging, and labelling rules, as unfair trade barriers to prevent imports from China, Brazil, Mexico and the lot of the underdeveloped South. Unless genuine efforts from EU and US are seen, by what right do they have to lobby for a "free" and "fair" trade.
Lucio B Pitlo III, Quezon City, Philippines
Each nation wants to have any trade deal to its advantage. Countries attempt to protect their native products by limiting (taxing) imports. Some of the most powerful nations have seen their currency fall to new lows, which make their exports more desirable. It is a complex equation. There are college educated bean counters who cannot agree on what works and how the game of international finance and trade should be played. The only agreement is that tomorrow will be different than today.
Colin, Milton, USA
Free trade, if it means unrestricted trade across any international borders, is going to do more damage than good. The area I live in is based on farming and manufacturing, and many of my friends live on farms. By ending these subsidies, I would see many of my friends' farms close, and tens of thousands of acres of land sent useless. Trade barriers and subsidies are essential to help my area stay prosperous.
Andrew Reed, Lancaster, PA, USA
I always find it funny that people are so quick to blame China for trade imbalances and loss of manufacturing jobs here in the states. The truth is in the last ten years China itself has less manufacturing jobs because they have used technology to make production more efficient. More US workers are displaced by states competing for companies to relocate to their area than outsourcing or off-shoring. Besides, when the goods at Walmart are cheaper we all have more in our pocket to spend perhaps on something we still make here.
Ken, Los Angeles, CA, USA
The definition of 'free trade' to Western nations is 'it costs us nothing'. If true free trade were to happen and goods were bought and sold at their actual cost of manufacturing, unemployment levels in the west would rise ten fold at least. No government is going to let that happen.
David, Livingston, Scotland
Free trade and fair trade are not the same thing, because the system has been rigged from day one by the ostensibly impartial bodies such as the World Bank, IMF and WTO. These organisations exist to further enrich western corporations to the detriment of everybody else - it's no good pretending otherwise. Globalisation is much the same - the only winners are multinational corporations who take advantage of cheap labour wherever it can be found. All is not lost however, because global "trade" is only possible while the fuel cost for transportation of goods is cheap. Sooner or later, escalating fuel costs will stop globalisation in its tracks, and the suffering it is causing will come to an end.
Lloyd Evans, Brighton, UK
The West's massive agricultural subsidies need to be addressed if developing countries are to open their economies more. Also, more can be achieved in helping poor and developing countries by lowering trade barriers rather than giving them aid. True empowerment of the poor comes from increasing work opportunities there...but this can only come from lifting trade barriers.
Deepak Lalwani, London, UK
Trade wars - the worker has suffered most because worker rights and benefits are not adequately considered in the trade treaties. If workers in country 'A' are paid 50 cents per hour, how can a worker who is living in country 'B', receiving a much higher wage (but average for their needs in their home country) compete. What ends up happening is that country 'A' gets rich at the expense of its and country 'B's' workers.
Rick Loeffler, Waukesha, WI
Free trade is merely colonialism in disguise. The British economy destroyed the traditional agricultural framework of their colonies by introducing cash crops such as Indigo. Institutions like the IMF and World Bank are doing the same thing by bullying Third World economies into falling into line with the culture of conspicuous consumption.
Prashant, Toronto, Canada
Free trade is an unattainable chimera. Economic theory which justifies it on the basis that lower costs benefit the consumer tends to obviate that many consumers lose their jobs and thus their income. The welfare costs, paid by taxes out of the consumer's pockets, grow and are not computed as part of the price of the so called cheaper products. Many products do not become cheaper by being manufactured in underdeveloped countries but allow for enormous margins which are spent in unnecessary publicity and sponsorship (eg athletic shoes and clothes multimillion deals with sportsmen or sportswomen).
Enrique Puricelli, Montevideo, Uruguay
Planned economies do not work. The old communist block was a good example. Like it or not, most deprivation is caused by corruption, political violence and high birth rates. The incidences where trade barriers are the long term primary cause are relatively few and can be addressed.
David, Stratford-upon-Avon, UK
Fair trade, like a progressive tax system, should put a greater burden on the rich. I think that poorer countries should be allowed to protect new industries with higher tariffs.
Robin Edwards, Melbourne, Australia
If Europe cannot be trusted to honour the agreements they made 10 years ago with China then I wouldn't blame the Chinese from finding 'alternative' ways to get their goods into Europe. What people don't seem to realise is that many of the goods coming from China are made in factories funded by European investors, using, in many cases, high tech equipment imported from Europe and having order books full from European buyers. This is another example of bloated European Parliament unable to stick to its decision because there are too many members with self-interest in trade restrictions. I used to be pro-European but this is yet another reason why I have become very anti. All countries should be free to make their own trading policies.
Arthur, Derby UK
Free trade will mean abandoning some national industries and depending on other nations. The US cannot beat Chinese prices on basic industrial items, nor can China compete with US technology. Cooperation is necessary, but must be preceded by trust (in the form of transparency) and political stability.
Forget it, it cannot add up. For centuries, the West has prospered because of trade imbalances and unfair advantages when it decides to open up to the poorer nations. Only when the developing world partners with each other will it assume some higher advantages and bargaining powers.
David Mugabe Alele, Kampala, Uganda
All this talk of free and fair trade is a joke. Free and fair trade for who? So that the ultra-capitalist can gain access to more markets to cause massive retrenchments and make the poor poorer? I do not believe in too much protectionism but if free trade means more poverty for the poor, then protectionism is worthwhile.
Atsu Agbemabiase, Accra, Ghana
Rich countries are trying to protect their advantages and privileges at the expense of millions of poor farmers who could benefit from fairer trade.
Amy Barry, Oxford
At the click of a mouse I can order a watch from Hong Kong, a suit from Italy and an ipod from the US. Technology is already loosening the grip of national regulation and middle merchants. True global trade at an individual level is coming and can't be slowed by politicians or middle men. Time they accepted this rather then trying to fight it.
Matt Munro, Bristol, UK
I think this trade imbalance will deepen into further socio-economic strains between the wealthier and poor economies. Once emerging powers like China, Brazil, India begin to flex their political, economic clout they will team up with wealthier countries and finally the poor African nations will suffer from rest of world.
Paithankar Karthik, Leipzig, Germany
The concept of free trade is intended to open up the global market for the big multinational corporations of the developed world. They uphold these norms as long as their interests are served. As soon as the emerging economic powers like China and India challenge their monopoly, they do everything in their powers to protect their interests by means of economic sanctions, protectionism and in extreme circumstances even going to war! In essence, free trade means enrichment of the already rich and ruin the economies of nations who are already very poor!
Srinivasan Toft, Denmark
I'm afraid trade wars are an inevitable reaction to the uneven pace of trade liberalisation. Bush's recent announcement at the UN wasn't really all that helpful. Firstly, it was conditional. The US will eliminate all tariffs if other countries do so too. Even if the US were to "lead the way", in trade liberalisation, surely it'd only apply to trade with the US. We'd feel we were getting cheated by the system, erect tariffs and we're back at square one. I don't support it.
P. Bolton, US
We are supposed to be part of a global economy - free trade should mean free trade. The damage to UK industry happened a long time ago. We need to see how we can compete in the global marketplace rather than try to place restrictions on others.
Mark, Nottingham, Great Britain
America cannot sustain its high standard of living without somebody else in the world paying for it. It's a basic economic fact: the US cannot compete fairly with countries like China because the costs and scale are in China's favour. Not surprisingly, US Presidents try to ensure that the US standard of living doesn't slip under their watch, so they try every trick in the trade book to protect and subsidise US industry and agriculture, etc from having to face the rigours of true free trade. Global internet shopping and mail-order sales can circumvent government attempts to control trade. Eventually, the governments will lose control of trade altogether and have to accept that market forces will reign.
John Farmer, Henley-on-Thames, UK
I don't see how there can be a real 'global agreement on trade'. We would continue having the kind of lop-sided agreements that favours only America and Europe and not developing countries, especially in Africa. In a globalised world - are we not to concentrate on areas where we have comparative advantage? Perhaps the only area is agriculture and that is where the developed world continue to subsidise its farmers.
Ibrahim Abu, Abuja, Nigeria
Genuinely free trade would give the Third World the opportunity to escape poverty in a sustainable fashion without relying on patronising and often ineffective handouts. If only our political leaders had the courage to take on vested industrial interests.
Alex, London, UK
The US and EU have separate tax structures and import quotas for different countries even when in some cases they could get a product of better quality in less price. These standards are often based on political climate and trade benefits overlooked. I don't blame them but then they should not champion globalization, open markets and free trade.
Qureshi, Boston, MA, USA
Canada wouldn't be nearly as prosperous if we weren't a part of NAFTA. 96% of all trade flows without a hitch north and south across our border. 80% of all our exports go to the US and 40% of our GDP is from trade with the US. Whiney Canadians just don't realize how good they have it and don't expend any great effort to find new markets for our products.
Janet, Edmonton, Canada
Trade will always be lop-sided as countries are in different stages of development. The two fastest emerging economies of China and India are excellent examples. Recently China was accused of massive dumping. Fortunately this did not escalate into a full-blown trade war. So while agreements are reached, it is still doubtful whether a global (workable and practical) agreement on trade can be reached. The jury is still out on this.
Pancha Chandra, Brussels, Belgium
True free trade simply cannot happen without massive job losses in the West. Africa can produce virtually everything cheaper and at a higher quality than the EU or the US but is priced out of the market due to trade tariffs, yet it is these tariffs that protect domestic jobs. At the end of the day, you have to make a choice. Come out in support of big business and shareholders or everyday people. The IMF, World Bank, etc are there to make rich people richer. The peoples co-op's running in Argentina are showing us how to do things. Throw out the rich owners, let the workers run the factories and share the profits at a local level to improve local communities. Globalisation is wrong and at every attempt in the past has ended with massive wars as it collapses.
I'd like to make a comment to the many people on here accusing the US of unfair trade practices. I know we give large subsidies to farmers, which I don't agree with personally, but in all other respects, we have been very fair by opening our borders. And while I agree that some Asian nations are very open to trade, all of them cheat in other ways by interfering in the currency markets to make their exports cheaper and their imports from the US more expensive. That amounts to an indirect subsidy on all their exports and defacto tariffs on all their imports. So, will free trade ever be fair? - nope. If it ever does, look out for cheating in other areas, like currency markets.
SV, New York, USA
The US and other western countries have been using the IMF and World Bank as a tool to badger poorer countries into submission. While subsidizing their own farmers and producers in meeting competitive prices, the borrowing Third World nations are being told what to grow or else their loans will be withdrawn. This type of trade is neither "free" nor "fair".
True free trade would bankrupt most western countries in under 12 months.
Nathan Hobbs, Luton, UK
To Milic, USA, it is not possible to implement a free trade scheme "in which almost everyone benefits". Free trade always causes displaced workers regardless of how many new jobs are created elsewhere. In the long run the majority benefits, but in the short run there are many local casualties. This is hardly "fair" from their perspective.
Michael, Calif, USA
Where is this 'capitalist free market' everyone keeps talking about (especially the Americans)? All I see are Third World countries being flooded with EU/US produce that was heavily subsidised by the government. How can supposedly capitalist nations demand that other nations open up for trade when this is going on?
Franchesca Mullin, Belfast, NI
NAFTA was a huge disaster for America's workers. Canada gets to sell her products, Mexico gets tons of jobs and unfettered traffic across our southern border and the American working class gets the shaft. It may sound fair to reduce poverty in poor nations, but who's worried about the rising poverty in rich nations?
Paula, Boston, US
Fair trade is a classic "prisoner's dilemma". It can bring the best benefits only if all sides cooperate and play fairly. But there is always the temptation for nations to cheat and grab an advantage. In the end, man's greed leads to each nation looking after its own interests even at the expense of someone else.
Ibrahim, London, England
Canadians, more than anyone, know what "free trade" with the US is really like. One needs just to look at the endless appeals to the WTO rulings against the US in the softwood lumber dispute to realise that if the US doesn't come out on top of a deal, they will find a way to circumvent it. I would urge all countries to be very careful in what they wish for - they may just get it.
M. France, Kelowna, Canada
Political stability is the greatest of all free trade, and there are huge markets waiting to be tapped. We need to promote manufacturing investment in Africa to balance out world trade. It's a fact the manufacturing will be where the cheapest labour costs are.
Martin Parkes, Hemel Hempstead, England
Western Europe and the US have developed a social model based on unsustainable levels of personal consumption, which is in turn based on unfair economic advantages - originally, colonial exploitation, and now the management of a rigged system of trade rules. The coming WTO Ministerial in Hong Kong, in December, has got to address the export subsidies that rich countries give to their products (such as cotton) as well as market access for poor countries (who currently pay little tax on exports of raw materials such as cocoa beans but pay hugely on finished products such as chocolate). It's not a question of "Can there be a global agreement on trade?" - there has to be a global rebalancing of international trade rules to help poor countries do better .
Neil Alldred, Belfast, Northern Ireland
There is a very big difference between fair trade and sustainable trade. Fair trade merely has to be honest: the seller must own the goods and the buyer must pay the agreed price, however high or low it might be. If however, the buyer strikes too hard a bargain, next time he or she wishes to purchase the same goods or services, the seller will not be around to sell them. This is unsustainable and in a truly free market it would stop.
Michael Lakey, Newcastle
We currently do not have free trade, contrary to what a lot of groups say. There are still markets riddled with protectionism, and under a system of protectionism, the most powerful trading nations will in effect state the terms and conditions of trade. This is what has been going on for over 50 years and Africa has been suffering partly because of this.
Nathan James, Durham, UK
How can free and fair trade be achieved when the primary motive of trans-nationals in profit maximization at all cost? What is feasible is minimizing the "uneven playing field" in global trade, which, "all other things being equal", will contribute in reducing poverty in poverty-stricken countries.
Sigismond Wilson, Sierra Leonean in Michigan USA
International trade can never be free especially in the system of states. It is because the capitalist system, which needs competition, accumulation, and free markets is in contrast with the states system that depends on national security, national interest, and sovereignty. However, there is possibility of fair trade with the support of and alliance among grassroots communities around the world.
Yin Min Kyi, USA
No, because individual countries will always have a protectionist attitude when it comes to jobs. NAFTA is a good example.
Christopher Southerlin, Anchorage, AK
I don't think world trade can ever be free and fair. If it does then US ad Europe stand to lose out to low production cost economies in east Europe and Asia which they will never allow to happen.
Aviral Sanghera, Bangalore, India
What free trade? All I see are double standards and hypocrisy coming from the EU and US. So far, all trade between the developed and developing countries go along the lines of "Open your (developing country) markets to our (developed country) products. We will then decide which of your products you can sell to us, if at all."
Jun, New York, USA
I am not opposed to Free and Fair Trade, the problem is it could take years if not decades to accomplish a level of Trade in which almost everyone benefits. In the mean time, their are high "adjustment costs" for transitioning to a free market. This is the issue governments and people must grapple with in the changing world. Many people in the US and Europe spend an enormous amount of time and money on their education when preparing for a specific career. They may also spend years on the job developing their career or specialized skill and to just watch the opportunity be shipped overnight to low cost China would be daunting for just about anyone.
There is no doubt that the international trade is becoming increasingly fair and transparent. The kind of trade barriers which existed just a short few years ago is unthinkable now. For instance it was not long ago Japanese tried to exclude the import of French skis on the pretext that the Japanese snow was different, till the French responded to exclude Japanese motorcycles on the ground that the French roads were different! It is difficult to visualize the incident of this kind now. In my own country India, the market is full of international brands which were unimaginable just a few years back.
N.G. Krishnan, Bangalore, India
Fair trade must be balanced with equal labour laws. An employee in the United States costs an employer almost twice his or her salary when benefits, insurance and other government mandated fees are applied. A worker in the US cannot legally be paid a low enough wage to compete with developing nations.
Adrian Leishman, Jacksonville, USA
There is no free trade, just as there is no free lunch. Access to markets, as well as access to cheap labour carries a price. Continuing to pretend that there is an unfettered reality behind the words "free trade" just makes more and more millions of people world-wide distrust the politicians and businessmen who use the term.
Joe, Santa Fe, USA
I have numerous friends who have lost their jobs because the jobs were "exported." If you lose your job because it was "exported" overseas, is that "fair?" Some say it is, but they are not the ones declared redundant. The 5 Euro a day worker in Asia that "imported" the job thinks it fair because he is now employed. A government's main responsibility is to its own workers first, not distant strangers.
Michael, Calif, USA
The worst thing Canada ever did was sign on to the North American Free Trade Agreement. NAFTA was supposed to open up the Canada-US border to fair trade, however the US has a very one-sided opinion regarding what is "fair". The minute US industries start complaining, all the rules go out the window and Canada ends up the loser. Global and free trade benefits the major powers at the expense of other nations.
Trade disputes are going to continue forever. There will always be the new entrant to the market thought to be trading unfairly either dumping goods, receiving subsidies or not paying high enough wages. I don't think the playing field can be levelled. But a question always arises - does the consumer always get the benefit of the cheap products or is it more a case of the distributor cashing in?
International trade has benefited the world for the most part. Granted there are still inadequacies. However, numerous nations have been able to develop because of opened borders. Yet, we still have to remember that the rapid globalization we're currently experiencing is a relatively new concept that (just like anything else) requires time to develop efficiency. Once the governments stop interfering with the natural course of supply and demand, the world will see the benefits more clearly.
Greg, Denver, CO, USA
Fair trade is a fallacy. The word "fair" itself implies equality. Companies in the US are all for using LCC (low cost countries) to move manufacturing to. The labour is cheap; labour laws and benefits non-existent, and the environmental laws are lax. This all comes because of trade associations like the WTO who have no plan as to how to make the trading fair for both buyer and seller nations. While the companies and WTO say they are bringing jobs to the poor, what these companies are really doing is lining their pockets.
The big guns will never allow the smaller countries to compete on the same scale. They will demand 'competitive' (read: cheap) prices and the world will continue this way until major governments realise that this type of manipulation isn't fair. Why should a farmer in Africa get terribly low prices for his crops so that I in the west can save a few more cents and some CEO can have a new car? Until modern day trade rules are completely revamped, the global market will continue to be run like this, in essence, capitalism at its worst.
Jason Robinson, Dublin, Ireland
Food is one of those commodities that a nation should not become dependent upon others to produce. I'm in favor of keeping subsidies in place. Many assume that reducing subsidies will encourage production in lesser developed nations. I, for one, am not willing to participate in a social experiment to see if this belief is valid. The consequences could bring poverty to all corners of the globe.
Rob G., Kansas City, USA
All the Western power will do whatever they can to stay superior to the third-world countries, including setting new rules, bending old rules, or just ignoring All rules.
John, Illinois, US
When you have countries like America who ignore every ruling in regards to trade issues with Canada by both NAFTA and the WTO, what is the point of free trade anyway?
Paul Girling, Toronto, Canada
A nation's first obligation is the interests of its own citizens. Generosity only goes so far and governments have to weigh the impact any agreements or changes in policy will have at home. In democratic countries, they also have to weigh the political impact. These are surely difficult choices deciding whose farmers or workers suffer at the expense of others. Right now in the area of agribusiness, it is apparent that neither Europe nor the US are prepared to make further sacrifices.
Free trade would mean prices, and wages would be comparable across the world. This wouldn't happen only by an increase in the wages in poorer countries, but also by decrease in wages (or/and loss of jobs) in richer countries for people whose jobs can be done cheaper elsewhere. Politically this would not be acceptable in rich countries, and no lobby could be effective for this. Outsourcing is more likely with the cushier jobs remaining in rich countries, and lower paying jobs being farmed out. After all, which CEO would replace him/herself to cut costs?
International Trade will never be free and fair. Labour costs differ across the globe, so governments slap on duties. Governments subsidise overproducing farmers, and then dump the excess on developing nations swamping the small market with products and putting local producers out of business. Human nature revolves around greed, we will always try to make more.
DW, Chicago USA (Brit Expat)
The EU shows what can be accomplished when people agree to live by a common set of fair rules. What appears to me to prevent this happening worldwide is the refusal of some to protect workers, consumers, and the environment in less developed areas, so as to keep prices down and profits up in the rich nations.
Matt, Riverside, CA, USA
We have free trade in industrial goods and services. Agricultural goods and labor markets need to have free trade too. Agriculture and labor exports are critical for eliminating poverty in India and sub-Saharan African countries. There is a need for some common environmental standards worldwide.
Professor Arun Khanna, Indianapolis, USA
International trade seems to be no different from international politics - the rich and developed countries will always be the ones who benefit. America is a classic example of expounding "free trade" but will be the first to breach any agreement when things don't go their way. At the end of the day, all agreements are "much ado about nothing".
Husni, Kuala Lumpur
We must have rules and they must bring everyone onto a level playing field. In China the workers get nothing close to what they get in the U.S and Europe. There must be incentives to improve the lives of the people and then trade with China and India will be similar to the US and EU. Just bickering over stuff and eventually both sides give a little.
Todd, Virginia, USA
Fair trade is a chimera. The whole purpose of the European Union is to create a favourable trade zone for member states and to create collective trading power for a wealthy handful of nations. This has always been true of the United States too. Mandelson's comments on liberalising farm trade, which rather flies in the face of Tony Blair's insistence that the EU cuts subsidies (but we're used to inconsistency from Labour), is a typically cynical remark from the master of spin: it is not subsidies that keeps Chinese goods free, but lower wages, more efficient production, less red tape and less irresponsible taxation and public spending that really gives Asia the edge.
Mike, London, UK