Free Trade Is Superior to Protectionism
I will honor your request to accept this debate. I wish you the best of luck.
Free trade is superior to protectionism in terms of international trade.
BoP is shared. It is pro's burden to prove the resolution, while it is con's burden to prove the opposite (that protectionism is superior to free trade).
Free Trade: "The unrestricted purchase and sale of goods and services between countries without the imposition of constraints such as tariffs, duties and quotas."
Protectionism: "Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses and direct state intervention."
Superior: "One that surpasses another in quality or merit."
International Trade: "The exchange of goods and services between countries."
1. The first round is for acceptance.
2. A forfeit or concession is not allowed.
3. No semantics, trolling, or lawyering.
4. All arguments and sources must be visible inside this debate.
5. Debate resolution, definitions, rules, and structure cannot be changed without asking in the comments before you post your round 1 argument.
Debate resolution, definitions, rules, and structure cannot be changed in the middle of the debate.Voters, in the case of the breaking of any of these rules by either debater, all seven points in voting should be given to the other person.
Round 1: Acceptance
Round 2: Presenting all arguments (no rebuttals by con)
Round 3: Refutation of opponent's arguments (no new arguments)
Round 4: Defending your original arguments and conclusion (no new arguments)
I would like to thank MilesandMilesofMiles for accepting this debate. While I am from the US and will probably have a lot of statistics from the US, I will attempt to prove my case from the international perspective. In this round, I will mainly look at the benefits of free trade; I will get to refuting protectionism in round 3.
I. Free Trade Satisfies Demand
No country has everything it needs to survive, and all states have or produce something that gains them export money, or a comparative advantage. This means that every country has a necessity for imports that is balanced by exports. This fulfilles consumer demand that would otherwise go unresolved. Imports and exports create more competition in each country's marketplace, and this lowers prices and increases efficiency, which means that free trade is a net benefit to consumers, and therefore to the economy as a whole.
All of the implications of this simple idea add up to a remarkable economic plan. For example consider that free-trade oriented economics have GDP-per-capitas of over 10 times higher than countries that aren't: "According to the Cato Institute’s 2004 report on Economic Freedom of the World, which measures economic freedom in 123 countries, the per capita gross domestic product in the quintile of countries with the most restricted trading was only $1,883 in 2002. That year’s per capita GDP in the quintile of countries with the freest trading regimes was $23,938."
"Of the 142 nations whose economies have been observed during this seven-year period, those that opened their markets the most grew twice as fast as those that opened them the least."
Free trade develops industries that are very helpful to the economy and to consumers: "The rule of law is the first and most important institution fostered by free trade. In order to enforce contracts, prevent merchandise robbery and damage, and protect ships and their crews, trading countries need to establish a framework of objective rules under which free trade will be conducted. At the same time, those countries need to have a law enforcement mechanism to apply those rules, such as a police force and an independent judicial system. The proper functioning of these two institutions encourages individuals to initiate businesses and to sell, buy, and seize to the maximum extent the economic opportunities of free trade. A third institution fostered by free trade is the banking and financial system, which gives individuals access to credit and a place to save and keep their earnings. At the same time, financial instruments, like checks and money wiring, lower the transaction costs associated with trade. Today, the Internet and other telecommunication technologies have significantly reduced the cost of trading worldwide. The result is that more and more people are able to reap the benefits of trading with any nation around the world."
Likewise, free trade promotes innovations in infrastructure: "Free trade also promotes the improvement and expansion of infrastructure. The construction of ports, where ships and airplanes can arrive and safely unload and load merchandise, must expand to accommodate free trade. Hangars and other types of barns located at ports offer the opportunity to store merchandise temporarily. At the same time, free trade fosters the construction and preservation of roads for trucks and automobiles to transport merchandise safely to its final destination."
That's about the extent of my introductory argument. I'll have a lot more to say in the next two rounds when rebuttals and defense come, but I feel that my essential argument has been offered.
Firstly, I would ask that you refrain from using such brazenly partisan sources as the Cato Institute and the Heritage Foundation to support anything other than your opinion (as opposed to facts). Both are largely policy mics for corporate interests and neoconservative political pundits rather than empirical sources of evidence and have been know to distort statistical information on issues regarding welfare, global warming, and tobacco related illnesses (The stated message of the Heritage Foundation being to "formulate and promote conservativepublic policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense" and Charles Koch [petroleum magnate] being one of the founders of the Cato Institute).
Secondly I would again ask if there are any books or essays that have helped you shape your opinions on trade policy so I can get a better idea of where you are coming from. Thank you.
My thesis: Globalization has been the leading perpetuator of famine, environmental erosion, poverty, and human rights violations globally.
First: Brief History of Trade Policy Amongst the Developed World
I do not see the value in debating the merits of protectionism versus free trade in America as free trade has been a runaway success for us since it was implemented following WWII. The reason it was so successful? Over a hundred years of protectionist policy which allowed northern industry to develop to the point where it was competitive both domestically and internationally. Britain was far superior to us in manufacturing until well into the 19th century and was dominating the market for such goods here in the US during the colonial era. Prior to the American revolution, England actually made illegal the domestic production of goods that needed to be manufactured because they knew that once America had a self sustaining industrial economy, they would be significantly less dependent on English exports. This also came with the strict enforcement of anti-smuggling which undermined British trade.
The US has historically had high tariffs in relation to other like (western) nations that have averaged well above 20-30% in some decades . Another reason the US was able to develop their industrial capabilities was their complete disregard for international copyright and patent laws, something they now fervently uphold in the developing world when it comes to protecting the drug and agricultural industries’ (more accurately cartels’) patents. This sort of economic policy was very characteristic of the now predominant industrial powers in Europe as well.
What I will debate with great fervor is the fact that globalization has been the leading perpetuator of famine, environmental erosion, poverty, and human rights violations globally.
Since WWII, the US has “kicked away the latter” to quote Cambridge economist Ha-Joon Chang. The very policies of protectionism that helped build up the US’ once infant economy, was now being unilaterally prohibited in countries with lesser developed economies.
The effect of liberalizing trade globally is reflected in several disturbing trends:
The Decline of Subsistence Agriculture and the rise of Agribusiness
Lowering import tariffs has allowed multimillion dollar corporations to landgrab large agricultural areas and has brought up a little concern called “food security” in many regions that have plentiful and fertile land that has the potential to sustain the population and export to the global market . Unfortunately, with the primary land owners being unaccountable corporations, the emphasis is more on the latter, with production geared exclusively to cash crops for export. With no labor or trade regulations, these ‘businesses’ can pay their workers next to nothing while charging extreme markups to consumers like us for commodities like fruits, cocoa, and coffee.
Since the population cannot live off these cash crops, nor can they afford the expensive imported foreign food on their meager salary, many of them must choose between feeding themselves or their child or an elderly parent (because remember there is no social security with austerity, but more on that later).
So when really the difference between global famine and global prosperity comes down to marginal corporate profits, why can’t the government do something to curb this disaster? Because the one thing on the mind of a politician in the 3rd world is debt debt debt debt.
The Obscene rise of Fruitless Debt in already Poor Nations
Consider the hundred million dollar hydroelectric power plant built in the Congo for a rural population consisting largely of farmers and peasants living in mud homes. They did not benefit from this, only the American firm who got the contract to build the plant did. Why did the dumbass govment do that? Well because the dictator of that government, Mobutu  (the son of a Belgian judge), owes the US and Belgium big time for ousting the democratically elected prime minister (wouldn’t be the first time) Patrice Lumumba who supported nationalizing the economy and raising money through tariffs to support the very destitute population of the Congo.
Mobutu had one of the worst human rights records and most documented examples of flagrant corruption in Africa, yet was simultaneously the third largest recipient of US aid (largely due to it’s anti-communist stance)… 
On another note: Cuba has a nationalized economy and currently has 80,000 doctors working abroad yet has had non-existing diplomatic relations with America for decades.
Anyways this effect of these de facto subsidies to US industry is a policy of austerity, a condition many banks such as the IMF and World Bank make conditional to their development loans. As much as 30% of a country’s budget may in some cases go straight to paying down the national debt . This crisis–known as the third world debt crisis–got so embarrassing the G8 actually cancelled several billion dollars in African debt that was largely just interest. Thats several billions of dollars that could be spent on healthcare, education, infrastructure, in a place that needed it most, yet what the bankers and politicians care most about is honoring debts and continuing the flight of capital from the producer nations to the consumer nations like us .
In the arguments that follow I will go into the numerous cold war conflicts the US has aggressed or supported in order to maintain it’s economic hegemony.
I would like to thank my opponent for presenting his arguments. Before I begin, however, I must make an argument for my sources. Both the Heritage Foundation and the Cato Institute are, at the very least, semi-reliable sources who, by far, are above the level of "neoconservative rant", especially in the case of the latter, and they rely on peer-revewed outside sources for most of their arguments, as evidenced in the two sources I cited from. In addition, they are certainly more reliable than Wikipedia. Finally, my opponent doesn't seem to understand that: "Debate resolution, definitions, rules, and structure cannot be changed in the middle of the debate." He does not have the authority, especially in round 2, to make new rules. I will continue to use articles from both sources.
I. Brief History of Trade Policy
The argument that tariffs cause development is an old one, but one that doesn't stad up to scrutiny. For example, around 1940, countries in Middle and South America and Africa went through a Import Substitution Industrialization Phase, in which they protected their fledgling industies by levying very high tariffs on imports. It worked for a while, but eventually, the system failed, and they were forced to take costly loans which, coupled with the Structural Adjustment Policies, basically turned thoes economies to almost nothing. In other words, tariffs don't really protect growing economies. America's economy grew because of other reasons, like its free-market capitalism and low taxes.
This applies more to the microeconomical standpoint, but it has basically the same implications on the macroscopic level: "But if consumers are forced to indirectly subsidize inefficient domestic producers for eighty years in the hope that they will one day become competitive, then the proposal sounds far less appealing. The fact that those espousing the infant industry argument never even mention the time frame just shows how little thought they've actually given to their proposal."
Fledgling industries have a mechanism for staying alfoat for a couple of years - the loan: " Plenty of new firms, especially sole proprietorships, don't make money in their first few years of operation. But so long as the present value of the firm's expected future cash flows is positive, the firm's owners should be able to borrow money to finance the first few years as they develop experience, name brand trust, etc."
On the more relevant macroscopic level, the U.S. was in the middle of its industrial revolution, while the British had already had most of theirs. Free trade forced British industries to compete with the world, making them better and more efficient. That allowed the Britain to experience its industrial revolution sooner than countries like the U.S., where tariffs subsidized inefficient and failing businesses. The U.S. eventually did surpass Britain in exports, but only because of the rapid growth in population and capital relative to Britain.
Overall, the argument that tariffs are responsible for economic development is a bad one because it implies that correlation proves causation, and therefore, it doesn't really explain the point brought up.
II. Colonial Countries
This argument simply misrepresents the problem. Those countries' economies went down because of their policies of heavy protectionism. Between this and the Federal Reserve (specifically in Middle and South America), loans were required in those countries from organization like the IMF, which are not pure free trade associations. The one thing that features in all of my opponent's arguments here is government and loans, both of which are not synonymous with free trade. Further, what America has done in Africa is not promote globalization, but promote protectionism itself (in other words, America is protecting itself by exploting other countries). So, this argument is not very relevant to this debate, and in fact, it should support the affirming side.
Here is the essential argument: "Prior to the tariff, the price of the good in the world market (and hence in the domestic market) is Pworld. The tariff increases the domestic price to Ptariff. The higher price causes domestic production to increase from QS1 to QS2 and causes domestic consumption to decline from QC1 to QC2
This has three main effects on societal welfare. Consumers are made worse off because the consumer surplus (green region) becomes smaller. Producers are better off because the producer surplus (yellow region) is made larger. The government also has additional tax revenue (blue region). However, the loss to consumers is greater than the gains by producers and the government. The magnitude of this societal loss is shown by the two pink triangles. Removing the tariff and having free trade would be a net gain for society.
Tariffs would hurt lower and middle class families by forcing them to pay higher prices for goods. Tariffs increase consumer goods, especially goods such as clothes and food. Since low income people spend a much larger percentage of their income on consumer goods, they are disproportionally hurt by tariffs. For example, even our currently fairly low tariffs transferred $11.8 billion from American consumers to farmers, amounting to an annual 'food tax' of about $100 per household. Therefore, they do not help the common man, but hurt him.
Tariffs have not helped developing countries, but have actually made them take out dangerous loans to non-pure free frade organizations that put those countries in an even worse position, disproportionally hurting the common man. Any argument I haven't covered is either irrelevant (levying a tariff would not solve industrial problems, like in agriculture) or is part of one of the three points I bolded.
: Crafts, Nicholas. Britain's Relative Economic Performance, 1870–1999. London: Institute of Economic Affairs.
: Pulsipher, Lydia Mihelic and Alex Pulsipher. World Regional Geography Concepts.
: Stockman, Alan C. Introduction to Economics.
: Mankiw, N. Gregory. Macroeconomics.
: Organization for Economic Cooperation and Development, Agricultural Policies in OECD Countries: At a Glance 2008.
Sorry if I inadvertently broke the debate format. I thought round two was for presenting arguments and not to refute. Also while the Cato Institute and the Heritage Foundation may rely on like minded peer reviews to vet their opinion pieces, Wikipedia entries features a broad range of citations from numerous scholastic sources, so I think it is fair to say Wikipedia is a far more reliable source of empirical information. At least half of my information can be found directly in the CIA factbook.
Also, the existence of a purely free-market economy is about as rare as a barter economy or anarchist society; they largely exist in the minds of anthropologists and economists. Striving towards an unattainable goal is not wrong, it’s what keeps people working towards a [more] perfect society, but working towards a free-market economy is just plain arbitrary. Why not strive towards a society in which famine, environmental erosion, poverty, and human rights violations are virtually non-existent?
Of course in the vacuum of a world that austrian fundamentalists live in, that would mean we here in the developed world would see our standard of living markedly decrease. Fortunately, this is not the case. The world produces more than enough food to feed everyone, the problem is that a billion people are too poor to afford it or don’t have the land to grow it. This is just one example of an artificial problem globalization has created.
I would like to thank MilesandMilesofMiles for this debate. Before I begin with defending my arguments, two things first. One, the second round was for the presentation of arguments - I'm not sure where my opponent got confused. And two, I'll leave the source problem to the voters. It would be useless for me to devote half of my argument to arguing for my sources and against my opponent's sources. Also, I am against patents and intellectual property as it reduces development and efficiency.
My opponent's main argument against free trade is that it fosters many of the institutions that protectionism has encouraged. For example, famine, while still a very big problem, has been drastically reduced in net severity. Economic diversity and globalization has allowed for the import of food to places where it is needed most. In this list of the 10 greatest famines in human history, none have occurred in recently in regions where globalization has been instituted. In locations such as North Korea, the former Soviet Union, and China, their famines were the result of excessive state regulation in agricultural equilibrium and the refusal to import food.
The same holds true for environmental erosion, poverty, and human rights abuses. These are the most severe in regulated, isolated countries like Zimbabwe, North Korea, Sudan, and Bangladesh. And states with the lowest rates of these problems are all globalized, like New Zealand, Norway, and Japan. In other words, the supposed correlation between problems and globalization just isn't there. The truth is that globalization and free trade allow the taking advantage of comparative advantage - countries can produce the most efficiently what they can and import what they can't. No country can produce everything it needs the most efficiently.
Next, my opponent claims that I must support the IMF to support my position. However, this is not true. "If there were no IMF, governments whose currencies were shaky as a result of their reckless fiscal and monetary policies would be forced to go to private bankers or investors to extricate them, and private investors would insist on guarantees of fiscal and monetary discipline as a condition of such help." The IMF ties certain countries' economies to the fluctuations of others, which is not a belief of or symptom of free trade. Free trade does not mean the integration of economic policies but of supply and demand curves.
Then my opponent returns to the same argument I have already refuted above. Free trade has allowed for developed countries to export their surpluses to undeveloped countries, thus reducing the incidence of famine dramatically. And it is isolationism that has caused many of the modern famines that have been some of the most deadly.
Next, my opponent argues that it is free trade that has caused the rampant outsourcing of jobs as of late; however, the real blame should be placed on government interventionism in the economy. Excessive regulation in the economy is basically the thing that has caused the problem of outsourcing. "It is obvious that in unhampered labor markets, wages (at least for some occupations) would be lowered as a result of free competition. Changing demand conditions and technical advances make some occupations obsolete. The workers in those sectors either have to re-educate themselves to be able to perform different tasks, or become unemployable at a certain wage level. Market dynamics force nearly everyone to readjust from time to time—few are spared these painful changes. But refusing to carry out this readjustment by using government coercion only creates opportunities for the foreign workers willing to work for much less then their American counterparts."
Finally, my opponent tries to salvage his argument on England - however, his argument doesn;t really address my refutation. True, England did have a very large stake on the global market, later on, other countries, such as the US, began to enter the market, and competition lowered prices. Tariffs reduced the amount of outside capital that helped fuel the industrial revolution. In addition, if you look closely at the U.S.'s economic expansion during that period, you'll see that it was not tariff protected industries that led America's surge during the late 19th century. The fastest growing industries were transportation, distribution, utilities, communications, and construction. Protected steel mills and textile factories were relatively stagnant.
In conclusion, free trade has resulted in an unprecedented increase in global prosperity and by comparative advantage, resources have flowed from places to surplus to places of shortage, resulting in a drastic decrease in shortages that have resulted in famine and other problems over the years. Tariffs and other protectionist ideas are obviously an impediment free trade policies, but because that is such, those ideas make those positive aspects of free trade less effective. Overall, the lifting of tariffs and the establishment of free trade has led to the most prosperous era that human history has ever seen, and protectionism is a step backward in the progression of civilization.
: Irwin, Douglas A. "Tariffs and Growth in Late Nineteenth-Century America," National Bureau of Economic Research.
Thank you to Subutai for this lively debate. I will dedicate this closing argument to presenting a number of cases in which countries have seen a decreased rate of growth due to the implementation of free trade policy.
The story of Mexico – poster boy of the free-trade camp – is particularly telling. If any developing country can succeed with free trade, it should be Mexico. It borders on the largest market in the world and has had a free trade agreement with it since 1995 (the North American Free Trade Agreement or NAFTA). Free trade economists argue that free trade benefited Mexico by accelerating growth.
Indeed, following NAFTA, between 1994 and 2002, Mexico’s per capita GDP grew at 1.8% per year, a big improvement over the 0.1% rate recorded between 1985 and 1995. But the 3 decade before NAFTA was also a decade of extensive trade liberalization for Mexico, following its conversion to neo-liberalism in the mid-1980s. So trade liberalization was also responsible for the 0.1% growth rate.
On top of that, NAFTA’s positive impact (in terms of increasing exports to the US market) has run out of steam in the last few years. During 2001–2005, Mexico’s growth performance has been miserable, with an annual growth rate of per capita income at 0.3% (or a paltry 1. 7% increase in total over five years). By contrast, during the ‘bad old days’ of import substitution industrialization (1955–82), Mexico’s per capita income had grown much faster than during the NAFTA period – at an average of 3.1% per year.
In Zimbabwe, following trade liberalization in 1990, the unemployment rate jumped from 10% to 20%. It had been hoped that the capital and labour resources released from the enterprises that went bankrupt due to trade liberalization would be absorbed by new businesses. This simply did not happen on a sufficient scale. It is not surprising that growth evaporated and unemployment soared.
Trade liberalization has created other problems, too. It has increased the pressures on government budgets, as it reduced tariff revenues. This has been a particularly serious problem for the poorer countries. Because they lack tax collection capabilities and because tariffs are the easiest tax to collect, they rely heavily on tariffs (which sometimes account for over 50% of total government revenue). As a result, the fiscal adjustment that has had to be made following large-scale trade liberalization has been huge in many developing countries – even a recent IMF study shows that, in low-income countries that have limited abilities to collect other taxes, less than 30% of the revenue lost due to trade liberalization over the last 25 years has been made up by other taxes.
It is perfectly possible that some degree of gradual trade liberalization may have been beneficial, and even necessary, for certain developing countries in the 1980s – India and China come to mind. But what has happened during the past quarter of a century has been a rapid, unplanned and blanket trade liberalization. Just to remind the reader, during the ‘bad old days’ of protectionist import substitution industrialization, developing countries used to grow, on average, at double the rate that they are doing today under free trade. Free trade simply isn’t working for developing countries.
Free trade economists find all this quite mysterious. How can countries do badly when they are using such theoretically well-proven (‘the economics is all there’) policy as free trade? But they should not be surprised. For their theory has some serious limitations. Modern free trade argument is based on the so-called Ricardian theory (named after David Ricardo)
The conclusion of the Ricardian theory critically depends on the assumption that productive resources can move freely across economic activities. This assumption means that capital and labour released from any one activity can immediately and without cost be absorbed by other activities. With this assumption – known as the assumption of ‘perfect factor mobility’ among economists – adjustments to changing trade patterns pose no problem. If a steel mill shuts down due to an increase in imports because, say, the government reduces tariffs, the resources employed in the industry (the workers, the buildings, the blast furnaces) will be employed (at the same or higher levels of productivity and thus higher returns) by another industry that has become relatively more profitable, say, the computer industry. No one loses from the process.
In reality, this is not the case: factors of production cannot take any form as it becomes necessary. They are usually fixed in their physical qualities and there are few general use machines or workers with a ‘general skill’ that can be used across industries. Blast furnaces from a bankrupt steel mill cannot be re-moulded into a machine making computers; steel workers do not have the right skills for the computer.
This is a more serious problem in developing countries, where the compensation mechanism is weak, if not non-existent. In developed countries, the welfare state works as a mechanism to partially compensate the losers from the trade adjustment process through unemployment benefits, guarantees of health care and education, and even guarantees of a minimum income. In some countries, such as Sweden and other Scandinavian countries, there are also highly effective retraining schemes for unemployed workers so that they can be equipped with new skills. In most developing countries, however, the welfare state is very weak and sometimes virtually non-existent. As a result, the victims of trade adjustment in these countries do not get even partially compensated for the sacrifice that they have made for the rest of society.
Few would now dispute that communism failed as an economic system. But it is a huge leap of logic to go from that conclusion to the proposition that all attempts at economic planning don’t work. 
 – Chang, Ha-Joon. Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. New York, NY: Bloomsbury, 2008. Print.
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