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Originally Posted by politicophile
Free trade benefits all the nations involved.
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But tree trade means freedom from both government and private coercion. Let's keep that in mind and read on...
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Originally Posted by politicophile
I would be happy to go into details about why this is so, but your rant against removing barriers to trade is fairly general, so I'll just give a basic overview. To begin, in the Haitian rice farmers example, you are correct that it costs more to import nearly all the country's rice rather than just a small fraction. What you are leaving out of the equation is the cost to consumers to buy the rice sold at an unnecessarily high price by local farmers. The imported rice is obviously cheaper than the domestically produced rice, or nobody would buy it. Thus, despite your true but misleading claim that import costs rose, the consumers in Haiti need to pay less to buy their rice, which is a staple.
On the down side, all the Haitian rice farmers go out of business. In countries where agriculture is the major source of employment, this kind of undercutting can be devastating. In the short term, farmers will lose the means to support themselves. In the long term, Haiti will begin to produce a different sort of good that is comparitively advantageous.
The end result will be that the output of Haiti's rice industry will be replaced with goods imported from another country that were made more efficiently. Haiti will develop a different export that they can manufacture with comparative advantage to other nations. Thus, using the same resources, more goods are produced and the consumer receives them from lower prices.
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How do you or I know if they will find another good or service to export to take the place of rice? Even if they do, what are the odds that the rice farmers will have the skills to enter this new good or service industry?
Those who orchestrated Haiti's transfer to free trade knew that Haiti couldn't compete with the rice from the US. 75% of the workers in Haiti are in agraculture, btw. Once the rice industry is in shambles, corperations can move in and take advantage of political instability and a lack of labor laws. I'm sure you remember the news about Disney running sweatshops in Haiti back in the mid to late 90s. The reason those shops were able to operate is because of the vacume created by free trade. Because they were making 2-3 cents per hour, they were able to produce the goods at an extremly competitive price. The problem is that sweatshops are essentially filled with slaves working in sub human conditions.
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Originally Posted by politicophile
And as for the NAFTA riots, there will always be liberal college students who don't take economics courses. White American college students always seem to know what is best for people living in third world countries.
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I've only taken a few economic courses (and I'm obviously very liberal), but I understand the reprecussions of free trade on Haiti pretty well. I think it's best not to promote slavery.