Economic Equity should be valued over Free Trade
Debate Rounds (4)
Economic Equity: the idea of fairness in the economy, this could be expressed through economic forms of Affirmative action of redistribution of wealth. For this debate this term will be in regards to Economic Equity between countries and the use of affirmative action towards trade.
Free Trade: International trade left to its natural course without tariffs, quotas, or other restrictions. Concept currently valued by the WTO and countries within the organization.
should: ought to or must
valued: held to an important degree
Format of Debate:
Round 1: Acceptance of Terms (if con finds any of the above mentioned terms inaccurate or unreasonable then he may alter but only if followed by an argument as to why)
Round 2: Opening Arguments
Round 3: rebuttals
Round 4: Counter-rebuttals and/or conclusion arguments.
Free Trade inhibits the sovereignty of Nations.
Given the large amount of countries apart of the WTO it becomes more of a necessity then a choice for a country to join the WTO. The rules set by the WTO are against the use of trade restrictions or subsidies no matter the reason. The only real interest of the WTO is to remove trade barriers between countries. The problem with the motives of WTO is that they give countries the abilities to prevent bills or laws from being passed amongst their trade partners if it inhibits any of their trade interests.
Multiple cases have occurred in which many countries tried to pass laws that involved any form of trade restrictions which resulted in immediately being countered by foreign trade partners followed by the vetoing of the law by the WTO hence disrupting the sovereignty of the country and while the WTO claims to promote democracy this act inhibits the democratic process.
An example of this scenario occurred when the US passed a label on all exports to state their country origin (this was called the "COOL" labeling) On early December of 2008 the Canadian government asked for consultation with regarding America"s mandatory "country-of origin-labeling" (or C.O.O.L). The labeling gave the obligation to inform consumers on the retail level of the country of origin that purchased commodities came from. This included meats such as beef and pork. The designation of the COOL label stated that in order for beef/pork to be labeled as American had to have been exclusively born, raised and slaughtered in the U.S. This would completely exclude any imported livestock to the U.S water it be for feed or slaughter.
Canada claimed that the COOL labeling was a violation of the United States" obligations under the World Trade Agreement.
10 days after the file complaint made by Canada, Mexico and Nicaragua joined in Canada"s consultations.
Eventually the US lost the dispute and had to dump the bill.
It breeds unfair competition between developed countries and LDC"s
An example of this situation occurs in Jamaica. As of 2014 the Jamaican debt counts as roughly 140% of it"s GDP and is listed with a rather low HDI. The government is unable to fund most social programs to the country due to its growing debt to the IMF, the increasing debt has also lead to a rising unemployment and cost of living.
The problem with Jamaica"s debt is that it is unable to pay off their creditors by themselves as their debt tremendously outweighed the country"s own GDP making it dependent off of loans made from the IMF.
The conditions made that the IMF gives to LDC"s after each loan comes along the lines of breaking down more and more trade barriers previously by the country.
Every time that Jamaica removes its trade barriers it is completely outcompeted by foreign importers as the importers are often that of Transnational corporation that can afford to greatly reduce their prices against local sellers whom are unable to meaning that Jamaica becomes more dependent to foreign exporters even if they have a resource in abundance they still gain imports from foreign companies. This has led to a cycle of loans and debt that Jamaica cannot get out of due to the fact that they can only pay off their debts through loans from the IMF while the IMF pressured the country into removing trade barriers that would have previously remained essential to the growth of local industry.
The destruction of trade barriers are detrimental when it comes to the economic development of LDC"s as they are forced to compete with far wealthier countries and corporations.
Trade Organizations such as the WTO indirectly look after the interests of Developed Nations over LDC"s
This graph below compares National GDPs of various countries in comparison to large transnational corporations:
The WTO gain the funds for their loans through the donations of various countries. Countries that donate large funds are usually rewarded the most and gain the most benefits under the WTO. The US and various developed countries tend to donate the most to the WTO and benefit the most by the destruction of trade barriers.
Now look at the graph above. Here are the countries of origin these corporations have:
Wal-Mart: The US
Exxonmobil: The US
Royal Dutch Shell: The Netherlands
BP: The UK
General Motors: The US
Cheveron: The US
Once more you see that all of the TNC"s listed above are from Developed countries therefore showing how the interests of these country"s (whether they are the majority or not) are outweighed by the interests of LDCs" or developing countries. This bias towards developed countries shows how they benefit the most from Free Trade. Henceforth is why Economic Equity should be valued as it causes great disparity between nations.
9. Documentary "Life and Debt" (Link unavailable)
I will begin by saying that it is a very noble cause to promote equity amongst nations to improve the prosperity of countries - but the best way in which this is to be done is through free trade rather than placing tariffs and providing subsidies to select or favoured industries. As such implementing policies that promote equity at a national level can be counterproductive and are not as effective as free trade.
The polarisation of wealth distribution within developing countries is oftenmore than that witnessed in developed countries (1). As a result, the owners of capital receive the lion"s share of the benefit in relation to tariffs levied on competing products. Alternatively, every man and woman in the street is forced to pay higher prices for their day to day living or as inputs into their own businesses. International equity policies thus can have a detrimental effect on problems of equity within a country.
My opponent has shown the influence large multinational corporations can have, and this is also the case within their domiciled countries. Large industries with considerable political clout and nuance are able to lobby the government for protectionist outcomes that favour themselves, but to the detriment of all other citizens as they are forced to pay higher prices for goods and services. These costs then flow through to other products being produced, making them also more uncompetitive on the world stage.
Providing certain industries with favoured treatment, whilst committing the populous to pay higher prices is the truly undemocratic feature of protectionist policies.
Tariffs and subsidies reward the inefficient and distort markets by creating price signals that are not there. This can be seen with first world agricultural producers bringing to market goods that have been grown based on incentives from their governments rather than from a pressing global need. Over thirty per cent of the EU budget is used to provide financial support for agricultural producers, limiting international competition in this area. (2)
Rather than free trade being a negative force for third world countries, it is actually the restrictive trade practices of first world countries in relation to primary production that causes much of the harm. Developing countries are urged to lower tariffs and the like on manufactured goods, but the favour is often not reciprocated when it comes to the agricultural goods they have a comparative advantage in producing. (4)
Farmers in developed countries are very vocal in attempting to restrict the flow of imported goods. Not a year goes by without French farmers driving their 250,000 Euro tractors into Paris to decry the importation of food stuffs. (5)
Food that is more expensive than it needs be affects those on the lowest income the most as they spend a greater proportion of their income on the bare essentials.
You cannot lead your country to prosperity by making your citizens pay more for goods and services, or taxing the majority and passing on these funds as subsidies to poorly performing industries. When it comes to protectionism, one country's tariff and subsidy measures to protect their self-interest is another country's obstacle in fairly selling their goods and services.
Free Trade is more important than poorly veiled self-interest as it is the way in which equity will be better achieved.
" Alternatively, every man and woman in the street is forced to pay higher prices for their day to day living or as inputs into their own businesses. International equity policies thus can have a detrimental effect on problems of equity within a country."
"Food that is more expensive than it needs be affects those on the lowest income the most as they spend a greater proportion of their income on the bare essentials"
However through subsidies of domestic industries and trade barriers from foreign competitors it allows the local economy and industry to grow. While prices may rise it would be mostly temporary. Take for example when I explained Jamaica's debt crisis. The other reason other then debt that Jamaica's economy fails to develop or grow stems from the destruction of trade restrictions allowing far wealthier TNC's to settle in Jamaica and causing the country to become dependent on foreign exports. Even resources that the country has in great abundance such as banana's are not sold and are instead favoured over cheaper foreign banana's causing not only a dependence on foreign exports but a completely stunted banana industry.
"Rather than FREE TRADE being a negative force for third world countries, it is actually the restrictive trade practices of first world countries in relation to primary production that causes much of the harm. Developing countries are urged to lower tariffs and the like on manufactured goods, but the favour is often not reciprocated when it comes to the agricultural goods they have a comparative advantage in producing. (4)"
"Tariffs and subsidies REWARD the inefficient and distort markets by creating price signals that are not there. This can be seen with first world agricultural producers bringing to market goods that have been grown based on incentives from their governments rather than from a pressing global need. (2)"
However this actually connects to my argument on Economic Equity. By allowing developing countries and LDC's to use tariffs and other trade restrictions it prevents outcompetition from foreign industries and allows domestic industries to grow.
"Providing certain industries with favoured treatment, whilst committing the populous to pay higher prices is the truly undemocratic feature of protectionist policies."
What is similarly undemocratic would be the WTO's allowing countries to veto any bills their trade partner makes if it inhibits free trade . So in fact a country voting for it's own protectionist laws is more democratic as it is the peoples choice to do so.
2. Documentary "Life and Debt" (Link unavailable)
"WTO" being undemocratic:
Countries are not required to join the WTO, they do so as they see the long term benefits of trade between different nations. This is especially the case for small countries that have only a limited market available in their own country. Due to their climate, technical or scientific know how they may have a comparative advantage that is not able to be taken advantage of fully if their market is limited to domestic output.
As can be seen from China, trade has had a massive impact in its rapid economic rise. They have stopped decades of being insular and have begun importing raw materials and producing goods enriching both those within China, those they buy the raw materials from and the consumers they sell finished products to.
Often it is not the people"s choice for trade restrictions to be placed " it is coming from the loudest and most vocal industry groups " who do not have a vote. Most people do not want their tax dollars going to industries " and sometimes large multinationals to prop them up.
As the above demonstrates Free Trade is key to the increase in wealth of a nation. The IMF knows this also, so if it is to provide relief to a country that has large debt burdens it will want to ensure that they follow policies that are going to get them out of their economic stagnation long term.
Jamaica"s largest export crop is Sugar. (1) The USA, who is a nearby country whose market is huge has a heavily subsidised sugar industry, where for much of the last twenty to thirty years farmers were paid twice that of the going global sugar price for their products (2).
As a result farmers that would have otherwise gone out of business, or moved to different crops continue to produce sugar that depresses the world price of sugar due to increased supply and hugely negatively effects the export earnings of Jamaica as this is its largest export.
"Bias in Free Trade"
I will agree that there is bias in Free Trade " in that case it is not truly "free". If barriers are brought down, they should be done so across the spectrum from agricultural produce to manufactured goods. Developed nations should stop pandering to special interest groups and lower all of their tariffs and subsidies so that their own citizens can benefit, as well as the citizens of their trading partners.
Temporary Nature of Subsidises and trade barriers.
The CAP of the EU was implemented in 1962, and still continues today " that is fifty years " two generations. This is not temporary and as a result of these practices has done untold damage to the ability of developing countries to find a market for their produce. It is counterproductive for developed nations to provide aid to developing nations whilst simultaneously spending more money on inefficient industries that has the opposite effect.
The Australia Government has poured hundreds of millions of dollars into the local car manufacturing industry for years. When this was removed recently the large car makers such as Ford, GM and Toyota have announced an intention of stopping local manufacture. Years of propping up the industry and the local population paying more for sub-standard cars has resulted in the inevitable. This government support was going not to local companies but large multinationals. (3)
People should be treated with equity, businesses not so much as it only rewards their bad behaviour and results in a drag to the overall economy.
By resorting to trade restrictions to protect perceived interests, the favour is simply reciprocated by other countries and it becomes a race to the bottom via a trade war. If everyone has the same tariffs and subsidies it becomes an even playing field again, but at a huge and inefficient cost. It is better to reduce the red tape involved in trade and bring in imports at lower prices so that exports can be produced at lower prices.
Implementing policies that seek to gain equity among nations is a flawed one. The best way to improve a nation"s comparative standing is to embrace free trade. As such Free Trade should be more valued that economic equity.
UtherPenguin forfeited this round.
- It levels the playing field
- It allows developing countries to exploit their comparative advantage
- Policies that promote economic equity reward inefficient industries, and socialising the cost
- Policies that promote economic equity hurt developing countries
- Policies that promote economic equity raise costs for all other produces in an economy, making them less competitive.
Vote Con as Free Trade is the best way for nations to build their wealth!
I thank you.
1 votes has been placed for this debate.
Vote Placed by Paleophyte 1 year ago
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Reasons for voting decision: Pro's rebuttals in round 3 were brief and round 4 was forfeited.
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