The Instigator
A.K
Pro (for)
Winning
4 Points
The Contender
debater217
Con (against)
Losing
3 Points

Free trade should be a norm

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
A.K
Voting Style: Open Point System: 7 Point
Started: 4/20/2014 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 1,806 times Debate No: 52969
Debate Rounds (4)
Comments (3)
Votes (1)

 

A.K

Pro

I am mainly looking to explore the economic implications of this topic, but political arguments are equally valid.

First, some definitions:
"Free trade" is the practice of encouraging mutually beneficial international commerce, by lowering barriers to trade (such as tariffs, anti-competitive subsidies, or other barriers).
"A norm" is a generally, but not universally, acknowledged and accepted practice.

Note: We are not debating that there should be no subsidies or tariffs, just that they should be the exception, not the norm.

These definitions are negotiable.

Rules:
Round 1: Acceptance of debate only (no arguments)
Round 2: Opening arguments only (no rebuttals)
Round 3: Rebuttals, new arguments permitted
Round 4: Closing statements, final rebuttals permitted.
debater217

Con

I accept all definitions given by my opponent and look forward to this debate.
Debate Round No. 1
A.K

Pro

Arguments:


1. David Ricardo proved that mutually beneficial trade is possible (http://www.understandglobalization.com...), through comparative advantage and the Production-Possibilities-Frontier model (PPF). Countries can have either (or both) absolute and comparative advantage. Absolute advantage means that a country can produce more of a good, X, than another country. But comparative advantage means that a country can produce X more efficiently than an other, relative to the other things that the second country could be producing, even if they can't produce as much of X. Here is a graph of PPF's for two countries that illustrates this concept:

http://www.economicsonline.co.uk...
(Click for picture)

In this diagram, the red country can produce more of both trucks and cars. If both countries are in autarky (no trade), than total output is 45 million units. But if both countries specialize and trade, they can reach an output of 51 million units.

Essentially, trade is not a zero-sum game. Both the United States and China can engage in mutually beneficial trade. Trade barriers obstruct this trade, and hinder economic growth in both nations.

2. Myth: Trade destroys jobs

According to the Hecksher-Ohlin theorem (http://en.wikipedia.org...), developed by Swedish economics Eli Hecksher and Bertil Ohlin (who won the 1977 Nobel Memorial Prize for Economic Sciences), countries specialize their exports based off of factors of production. For example, the United States has an abundance of human capital, and China has an abundance of labor. According to the theorem, the United States will excel at human capital-intensive endeavors, and China will excel at labor intensive endeavors. Essentially what this means is that when Chinese manufacturing "destroyed the United States Manufacturing industry," it paved the way for other American industries, such as healthcare and technology. Now, all of the lost manufacturing jobs became tech and healthcare jobs. This may sound counter-intuitive, but basic economic theory dictates that competition is, in the long run, very health for both economies because it forces them to operate efficiently.

3. By definition, tariffs create societal loss. (http://en.wikipedia.org...)

Tariffs raise prices. This hurts consumers, who must pay more, and to an extent, producers, who get fewer customers due to higher prices. A basic supply and demand model shows how tariffs create a net-loss to society, by preventing (or discouraging) mutually beneficial trade.

4. By definition, subsidies hurt developing countries (http://en.wikipedia.org...)

Subsidies lower prices, making foreign imports more expensive (relatively) to domestically produced goods. This harms workers and companies in other countries. In the Brazil vs. United States of America cotton dispute (http://en.wikipedia.org...), the World Trade Organization (WTO) found that the United States violated laws in engaging in mercantilist subsidies. This reduced prices and hurt Brazilian farmers, who suffered from the lower cotton prices. Also, while removing the subsidies would have caused US cotton production to fall, production everywhere else in the world would have risen, and farmers would have significantly more income.
debater217

Con

1. Free trade causes the flooding of exports which turns countries to protectionism methods http://ictsd.org...

The United States has had problems in the past with free trade, dealing mainly with Latin American countries. In 2012 Brazil's economy started to struggle as the United States began to flood exports to their country which was deflating the Brazilian coinage. When the United States floods another countries market the country has to close off free trade, or leave their economy to be cannibalized. So my opponent by advocating for free trade is also advocating for protectionism which makes his economic thinking circular.

2. Trade kills jobs NAFTA proves https://www.citizen.org...

Lets just looks at a great example of free trade, the North American Free Trade Agreement or (NAFTA). Over the 20 years NAFTA has been in place the United States has loss over 1 million net jobs because of the increasing of trade. NAFTA also destroyed 1 in 4 manufacturing jobs over the time period were the United States loss 5 millions manufacturing jobs in a 20 year span. Now my opponent tries to make a claim about how its okay if we lose jobs because they will be replaced with something better, three answers to this. A. Trade will never replace the 1 million net jobs we lost. B. Jobs replacing the jobs we loss in manufacturing aren't as key to the economy like manufacturing jobs, plus continuing globalization means technology will soon replace these jobs. C. Outsourcing jobs usually occur because the company believes they can do something cheaper, which means the inequality gap will continue to widen.

3. Regulations provide the best for competition http://www.oft.gov.uk...

Key part of the economy is consumer confidence in business and in the government. Without regulations there are no guarantees business will maintain consumer confidence. If consumer confidence goes down then, currency flow goes down, and if currency flow goes down then trade goes down. Regulations are key to maintain the economy, this is why we have never seen a free capitalism system yet, and why free trade shouldn't be the norm.

4. Free trade causes poverty http://www.huffingtonpost.com...

Free trade could offer some decent advantages to already seasoned economy's but what about the economies, that are trying to develop or are underdeveloped? Free trade makes sure to destroy any and all chances of a developing nation because their lack of technology, or lack of industry. Larger economies can swallow up the smaller economies forcing more people to go into poverty

5. Latin America is moving away from free trade. http://www.coha.org...

The expansion of free trade was suppose to bring prosperity to Latin American countries, now after review more and more countries are moving away from free trade. The question you must ask is why? It's simply because free trade hasn't worked and this is one of the main reasons why free trade shouldn't be the norm. Not only has NAFTA failed but other attempts of free trade implementation in Latin American has caused poverty, social dumping, and other extreme impacts http://pdfs.postprefix.com... Like Latin America the best option is to move away from free trade and embrace systems which advance economic nationalism.

6. Summary: Free trade causes protectionism which means free trade will never become, the norm. My opponent offers great economic theories, but the only bad thing about theories is they are disproved by empirical data. This is what NAFTA proves all the disadvantages of free trade. The government must always have some regulation in order to advance the economy and this is why free trade shouldn't be the norm.
Debate Round No. 2
A.K

Pro

I will now rebut these arguments:

" 1. Free trade causes the flooding of exports which turns countries to protectionism methods "

This is not a coherent sentence.

" The United States has had problems in the past with free trade, dealing mainly with Latin American countries. In 2012 Brazil's economy started to struggle as the United States began to flood exports to their country which was deflating the Brazilian coinage. When the United States floods another countries market the country has to close off free trade, or leave their economy to be cannibalized. So my opponent by advocating for free trade is also advocating for protectionism which makes his economic thinking circular."

Circular reasoning?

"Floods [of] another countries market [Sic]," can easily be balanced with more exports by Brazil. And actually, I used Brazil in my examples of why trade barriers and protectionism are bad - the 2012 import flood was likely caused by US subsidies.

And free trade does not "cause protectionism;" that is as fallacious as it is ridiculous.




"2. Trade kills jobs NAFTA proves https://www.citizen.org......

Lets just looks at a great example of free trade, the North American Free Trade Agreement or (NAFTA). Over the 20 years NAFTA has been in place the United States has loss over 1 million net jobs because of the increasing of trade. NAFTA also destroyed 1 in 4 manufacturing jobs over the time period were the United States loss 5 millions manufacturing jobs in a 20 year span. Now my opponent tries to make a claim about how its okay if we lose jobs because they will be replaced with something better, three answers to this. A. Trade will never replace the 1 million net jobs we lost. B. Jobs replacing the jobs we loss in manufacturing aren't as key to the economy like manufacturing jobs, plus continuing globalization means technology will soon replace these jobs. C. Outsourcing jobs usually occur because the company believes they can do something cheaper, which means the inequality gap will continue to widen."

So many issues. First, the Economic Policy Institute (EPI), which contrived that "1 million jobs number," is significantly liberally biased (as revealed by even a cursory glance at Wikipedia). A biased estimate is none at all. As a student of economics and econometrics, I can assure you that modeling these phenomena is a notoriously difficult task. And even if there were a credible fall in jobs, it is a. not necessarily attributable to NAFTA, and b. as I explained, not only temporary, but beneficial in the long run. And, this is only one data point, and NAFTA is only one example of a FTA (free trade agreement).

Trade will replace the lost jobs. I've explained the economic benefits of trade; jobs loss is ephemeral and in the long run productive.

"3. Regulations provide the best for competition http://www.oft.gov.uk......

Key part of the economy is consumer confidence in business and in the government. Without regulations there are no guarantees business will maintain consumer confidence. If consumer confidence goes down then, currency flow goes down, and if currency flow goes down then trade goes down. Regulations are key to maintain the economy, this is why we have never seen a free capitalism system yet, and why free trade shouldn't be the norm."

Wait what? I smell some grammatical and logical crimes... I am not advocating the abolition of regulation, simply the encouragement of trade. Regulation does not help consumer confidence; a strong economy does. And my argument, at its core, is not about regulation.

"4. Free trade causes poverty http://www.huffingtonpost.com......

Free trade could offer some decent advantages to already seasoned economy's but what about the economies, that are trying to develop or are underdeveloped? Free trade makes sure to destroy any and all chances of a developing nation because their lack of technology, or lack of industry. Larger economies can swallow up the smaller economies forcing more people to go into poverty"

No no no no no! Free trade empowers the poor! As I pointed out, protectionism hurts exports in all countries, especially poor and developing ones. Look at my discussion of Brazil. Protectionism hurt the country, and free trade has helped the farms. In addition, the "article" you cite fails to take into account the massive success of trade. Look at China, India, Russia, Brazil, South Africa, Vietnam, Thailand, Indonesia, Turkey, Poland, South Korea and others - they all share a similar story of a poor country turned (or turning) into a rich one. Due. To. Trade.

In fact, free trade seeks to empower the poor and the farmers by giving them trade opportunities.

"5. Latin America is moving away from free trade. http://www.coha.org......

The expansion of free trade was suppose to bring prosperity to Latin American countries, now after review more and more countries are moving away from free trade. The question you must ask is why? It's simply because free trade hasn't worked and this is one of the main reasons why free trade shouldn't be the norm. Not only has NAFTA failed but other attempts of free trade implementation in Latin American has caused poverty, social dumping, and other extreme impactshttp://pdfs.postprefix.com...... Like Latin America the best option is to move away from free trade and embrace systems which advance economic nationalism."

Economic nationalism is a horrible idea. The biggest reasons for the world's success over the past 200 years have been technological innovation, intellectual innovation, capitalism, democracy, and trade and openness between countries.



In conclusion, I've shown that these arguments are full of holes, and are poorly crafted - in both grammar and logic.
debater217

Con

Well time for me to rebut what my opponent has said.

1. "Floods [of] another countries market [Sic]," can easily be balanced with more exports by Brazil. And actually, I used Brazil in my examples of why trade barriers and protectionism are bad - the 2012 import flood was likely caused by US subsidies.

You missed the whole point of the argument. When the United States floods the Brazilian market it devalues the currency of Brazil, meaning that can not export more. They have to stop free trade or risk a currency collapse. Also it wasn't because subsidies, it was because of the loose economic policies the United States has.

And free trade does not "cause protectionism;" that is as fallacious as it is ridiculous.

"It"s clear that we have to take measures to defend ourselves," she added, rebuffing claims that Brazil"s measures to respond to these monetary pressures are protectionist. "I said defend, not protect. To defend is different, defend means " that we cannot leave our manufacturing sector to be cannibalised." These are direct words from, Brazil's President Dilma Rousseff. It clearly shows in order to protect Brazil's economy, they will have to go towards more of a protectionist economic policy, because of free trade.

2. So many issues. First, the Economic Policy Institute (EPI), which contrived that "1 million jobs number," is significantly liberally biased (as revealed by even a cursory glance at Wikipedia). A biased estimate is none at all.

This is an Ad hominen argument at best. Since you didn't provide numbers that NAFTA has actually created jobs you have conceded that job loss happened because of NAFTA.

As a student of economics and econometrics, I can assure you that modeling these phenomena is a notoriously difficult task. And even if there were a credible fall in jobs, it is a. not necessarily attributable to NAFTA, and b. as I explained, not only temporary, but beneficial in the long run.

The report directly stated that there was a loss of 1 million net jobs because of NAFTA. Also there was a 5 million jobs loss in manufacturing over that time of NAFTA implementation. While all manufacturing jobs were not loss because of NAFTA many were. On the second point I have pointed out how manufacturing jobs are key to the economy, and this point went conceded. The shift away from manufacturing plus continued globalization of technology means we will continue to lose jobs if we continue free trade. There is no benefit to losing jobs, and a degree in manufacturing can't turn into a degree of health care, which means brain drain will occur. Brain drain will also hurt the economy as well, so there are a couple instance's were trade will destroy jobs and hurt the economy.

And, this is only one data point, and NAFTA is only one example of a FTA (free trade agreement).

You didn't give any examples of a FTA being successful, so I still hold the empirical data in this category.

3. Wait what? I smell some grammatical and logical crimes... I am not advocating the abolition of regulation, simply the encouragement of trade. Regulation does not help consumer confidence; a strong economy does. And my argument, at its core, is not about regulation.

I will concede the point on regulations, but still maintain that tariffs help competition in the long run.

4. No no no no no! Free trade empowers the poor! As I pointed out, protectionism hurts exports in all countries, especially poor and developing ones. Look at my discussion of Brazil. Protectionism hurt the country, and free trade has helped the farms. In addition, the "article" you cite fails to take into account the massive success of trade. Look at China, India, Russia, Brazil, South Africa, Vietnam, Thailand, Indonesia, Turkey, Poland, South Korea and others - they all share a similar story of a poor country turned (or turning) into a rich one. Due. To. Trade.

First your contradict yourself with Brazil. Brazil's economy shouldn't be a top economy because of protectionism, but then you list their economy is successfully because of trade. Which one is it? Then there is a difference between a countries wealth and the wealth of their people. Mexico has a 500 billion dollar trade partnership with the United States, but still have 20 million people in food poverty. Another example is listed here http://www.theguardian.com...

For every dollar spent by a US consumer on imported asparagus from Peru, 70 cents stayed in the US, the industry explained. The money goes not to Peruvian farmers but to US supermarkets and wholesalers, and to US shippers, distributors, importers, and storage owners. Just 30 cents stays in Peru. (The UK too imports most of its out-of-season asparagus from Peru.) But Peru doesn't even get the full benefit of that 30 cents, because a large portion of the 30 cents Peru makes comes back to the US anyway: it is spent by Peruvians on US seed, US materials for processing, US fertiliser and US pesticides. US-based vegetable corporations, Del Monte and General Mills Green Giant, have been able to enjoy lower land values, cheap labour and low environmental costs by moving some of their production to Peru. The handful of corporations that dominate the global markets in seed, fertiliser, pesticides, trading, distribution and retailing take care of the rest.

Does that sound like free trade empowering the poor? No it doesn't free trade will always hurt the poor.

5. Economic nationalism is a horrible idea. The biggest reasons for the world's success over the past 200 years have been technological innovation, intellectual innovation, capitalism, democracy, and trade and openness between countries.

First this was an example of how countries who tried free trade are now moving away from it. Latin American realized that "free trade" really means US exploiting their markets. Free trade hasn't been the answer in Latin American and shouldn't be the answer anywhere. Economic nationalism offers an alternative to free trade.
Debate Round No. 3
A.K

Pro

Rebuttal:

1:
The subsidies caused US crops to be cheaper than Brazilian ones (see Brazil vs. USA, in the WTO in 2012). This caused Brazil to suffer. Protectionism promotes suffering. Also, FYI, a devalued currency makes exports more competitive, not less. This is common knowledge. Brazil easily could have exported more to balance this trade deficit.

As I said, American protectionism caused Brazil to suffer. Brazil enacted protectionist measures because the US did.

2:
Accusations of bias are now ad hominum? That is laughable. An ad hominum attack is a personal attack, like "the EPI is a neo-Nazi club that hates non-protestant non-whites," or "the head of the EPI is a misogynist," not "the estimate is untrustworthy because of the EPI's bias." And not providing numbers for NAFTA does not mean that I concede that no jobs were created. That is equally ridiculous. Here (http://en.wikipedia.org...'s_effect_on_United_States_employment#Job_creation) are some numbers. From 1993 to 2007, 700,000 jobs were created, or 100,000 annually, in NAFTA's first five years. If a million jobs were destroyed, wouldn't jobs have fallen by 300,000?

That study was absurd. It was produced by a biased institution, without detailed methodology, and attempted to calculate a phenomenon which can't be calculated. And lost jobs, if there were any, could be recovered. Since the US manufacturing industry was not as efficient as foreign manufacturing industries, it failed. It should have failed, and, because of capitalism, it deserved to fail. Capitalism is about profit and loss, and if loss leads to greater efficiency, than we need loss.

3:

Thanks for your easy concession.

4:
Your argument about Brazil was just torn to shreds, so there is no contradiction here. And yes, of course Mexico has poverty. But shouldn't a bigger economy, due to trade, help that? And your 70 cent statistic sounds staggering, but examine the value chain for Peruvian asparagus. In addition to Peruvian farmers, there were US distributors and retailers. This study should really have examines what fraction of the asparagus stays in Peru when the asparagus is sold by the Peruvian farmers to shipping and distribution companies. This is the statistic that should have been used instead, which is the money that the Peruvian earns. In other words, this argument is a joke.

Also, your guardian article cites higher food prices as hurting the poor. I agree that higher prices hurt the poor, and that is why I oppose tariffs, which by definition raise prices.

5:
From your arguments, we see that free trade in Latin America has "failed" due to political hurdles, not economic ones.



In conclusion, your arguments are contrived and ridiculous. You cited a study without checking the authenticity of its publishers, and continued to brandish it around. You failed to accept that tariffs raise prices and hurt the poor. You failed to understand that subsidies are uncompetitive, and that they fundamentally harm developing nations. You cherry picked evidence about the failure of trade, and ignored evidence pointing to it's success. And you failed to comprehend simple supply and demand diagrams that point to the inherent inefficiency and unfairness of subsidies and tariffs. Most of your rebuttals were a hastily developed chewbacca defense (a string of bizarre non-sequiters).


I would like to thank my opponent for a great debate. I learned a lot, and good luck.

debater217

Con

1. This is the matter of free trade vs protectionism and the number one issue in whole debate. Brazil's president specifically said, it was the free trade and the continuing of exports flooding that caused Brazil to look towards protectionism policies. Once again I would like to point out President Rousseff said it was loose economic policies, which does not include subsidies, that has caused the turn towards protectionism policies. So in summary unrestricted free trade will continue to ruin smaller economies, and make them turn to alternative methods such as protectionism.

2. Your accusations said it was a liberal institution so we shouldn't use the study. That is ad hominum when you provide no facts to discredit the study, but only use rhetoric that they are a liberal institution. Your study says since the US GDP was growing is must have been NAFTA that created all these jobs. I will stand by that the United States loss a total of 1 million net jobs because of NAFTA.

Onto the manufacturing jobs and capitalism, this will be covered in the poverty section

3. Concession was made here

4. 1st on Mexico: Mexico's poverty has been on rise recently, even when US and Mexico have continued to have a healthy trade. When 20 million of the Mexican people or 17% of the population can't afford food then you can see the fault in free trade. Free trade doesn't liberate the poor it liberates big corporations and hurts the poor. 2nd Peru: Peru loses 70% of its revenue to American farmers when it trades asparagus with the United States. Then out of the 30% only 5% goes back the farmers, sounds like the big corporations are once again winning, while the producers are suffering. 3rd will be the manufacturing and jobs: My opponent makes a big mistake with this argument because it insures that free trade will create poverty. In my first speech I talk about how free trade devastate developing countries, and my opponent built upon it on his last speech. He said capitalism is about profit; and countries who can not keep up with this capitalism cycle will lose. This proves that countries with bigger industries will continue to dominate the free market era, and will continue to flood the market just like the US is doing in Brazil. Bigger nations will always win in free trade while smaller countries will continue to be impoverished by free trade.

5. My opponent makes a costly concession here too. He concedes that Latin America has tried free trade, and they are now moving away from it. He doesn't contend my point about economic nationalism but attacks political hurdles, that have no relevance what so ever in the round. Latin America stands as the number one source of empirical evidence in this debate as why free trade should be rejected.

In conclusion my opponent tries to hide behind economic theories, and avoid the facts that happened because of free trade. He failed to show the Latin America is moving away from free trade because it doesn't have the economic benefit that is suppose to come with free trade. He fails to comprehend and provide reasonable analysis on the Brazil example of what free trade actually does to the nation. Finally in the last speech he says capitalism is all about profit, which means developing nation will continue to suffer under the free trade era.

I would like to thank my opponent also for a great debate.
Debate Round No. 4
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by Jifpop09 3 years ago
Jifpop09
By the way, I would be very interested in you doing a debate about National Economics. I don't really care about your side or the topic, but it would be interesting.
Posted by Jifpop09 3 years ago
Jifpop09
I'll vote on this debate as well. I'm a fan of free trade, but am not totally oblivious to the harms. The American school of economics has taught me that much.
Posted by Jifpop09 3 years ago
Jifpop09
I'm a big fan of free trade. I'll be sure to vote
1 votes has been placed for this debate.
Vote Placed by Jifpop09 3 years ago
Jifpop09
A.Kdebater217Tied
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Total points awarded:43 
Reasons for voting decision: RFD will be in the comments in a couple of hours. Currently, I'm on vacation. I will say though, that both sides need serious work on their formatting.