Arguments for and against free trade

Description: Over the past few years – and particularly in the period preceding the

election of Barack Obama as president – United States Americans

have become increasingly concerned about free trade, as the following

two reports/extracts show. Discuss the issues they raise.

From a Reuters news agency report of 5 March 2008:

The next US president needs to fundamentally redirect US trade policy

to not preserve manufacturing jobs and reduce the huge trade deficit

just tinker with the North American Free Trade Agreement, critics of

US trade deals said on Wednesday. “We need to change the whole

discussion about investment, about subsidies, about enforcement of

trade laws,” said Leo Gerard, president of the United Steelworkers

union. “How does any country continue to prosper when it’s

accumulating an average annual trade deficit of about $700 billion per

year?” (http://www.guardian.co.uk/feedarticle?id=7361024)

And from a May 2008 Pew Research Center report and survey of

public opinion in the United States:

With public views of the national economy continuing to be quite

negative, Americans now are taking a much more critical view of free

trade agreements. Nearly half of Americans (48%) say that the World

Trade Organization and free trade agreements such as NAFTA have

been bad for the country; 35% say such agreements have been good

for the United States. This is the first time a plurality has expressed a

negative view of the impact of free trade agreements since the question

was first asked a decade ago.

An increasing number of Americans also say that their personal

financial situation has been hurt by free trade agreements. The

proportion expressing this opinion has increased by 12 points since

December 2006.

Most Americans now say that free trade agreements lead to job losses

(61%) and make workers’ wages lower (56%); both percentages are up

sharply from 2006. In addition, half of the public says that free trade

agreements make the economy slow down, an increase of 16 points

since 2006. (http://people-press.org/report/414/obamas-image-slips-

his-lead-over-clinton-disappears).

This question is clearly about international trade and ‘free trade’ – and

potentially – about ‘global imbalances’. Some points you might

consider in your answer include:

• Theoretical arguments for (and against) ‘free trade’, frequently made

in terms of ‘general welfare’;

• The question of the extent to which trade in the US – both imports

and exports – really is ‘free’. Also how important to US economy is

international trade (imports as proportion of GDP; exports as

proportion of GDP)?

• Different ‘subject positions’. E.g., US steel-worker might have

different experience of ‘free trade’ to share-holders of his or her

company; that same worker is also a consumer.

• Both reports concern public opinion in 2008. Has that changed over

the past three years? Are the opinions expressed ‘reasonable’ given the

‘facts’? (Again, bear in mind the different ‘subject positions’.)

The above points/questions are examples only. The question is quite

broad; it gives you scope to answer it in many ways. But it’s very

important that you explain very clearly what your focus will be (in the

introduction to your essay) and reiterate this in the conclusion – i.e.

explain what your focus was and also note briefly other issues you

neglected (for reasons of space).

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