Free Trade

So, I just got done reading a fascinating article from the UK’s Guardian newspaper which took an interesting stand on “free trade” practices. To sum up, the article was about how so far no developing country has actually made sigificant profits from opening their borders to “free trade” and the “global economy”. In fact, it’s quite the opposite. Countries like Mexico, and the ones in Africa and Latin America which have privatized their industries and opened their borders to trade have seen minimal growth at best since they did so. Whereas countries like Vietnam which have sat behind high trade barriers (you can buy our goods cheap, but we’re protecting our local economy by taxing the hell out of stuff coming into the country) have actually seen large economic growth (6% per year as opposed to Mexico’s 1%) and reductions in poverty and overall standards of living. Other success stories include Taiwan and South Korea, which created economies focussed on exports, with import limits and government subsidies for their chosen exports. Their economies, which were “third world” a few decades ago shot through the roof with this approach, and China is using a version of it now to drive it’s own economy.

So, I guess the question becomes, who really profits from “Free Trade”? Is it the little guy? I think not. Opening borders to trade is wonderful for the big guy, he gets lots of cheap stuff and new markets for his goods, but for the little guy who can’t compete it means crushed local industries and people with no jobs. How exactly does that improve their standard of life? I suppose some might say they can find work in the service industry and export industries, but that’s what the Mexicans have done, and where has it gotten them?