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Poorer Countries Should Abandon Free Trade Agreements

The policy of Free Trade is still in debate due to the questionable benefit for each side. This debate doesn’t try to limit the effect of free trade to developing or third world country. It will however argue that poorer countries, in comparison to their trading partners, will suffer due to the ‘unfairness’ and ‘expensive’ nature of a free trade agreements. The proposition will plead for these countries to abandon free trade agreements, that we believe it will bring more harm than any benefits and that the opposition will have to explain in this debate how free trade is not only acceptable but is a promising solution for development.

All the Yes points:

  1. Free Trade is
  2. Free Trade is not Fair Trade
  3. Free Trade is not Free Trade
  4. Free Trade is not Fair Trade (opposition example)
  5. Free Trade is not Free Trade (opposition as an example)
  6. Free Trade is not Fair Trade: Corporations reaps the benefit more than host country
  7. Free trade is not Free Trade : Labor welfare for the price of macroeconomic indicators growth
  8. Free Trade is not Free Trade: Industry specialization is the price that outweighs the benefit of FTA
  9. Free Trade is not Fair Trade: Why countries should abandon Free Trade Agreements (Proposition Summary)

All the No points:

  1. Free Trade equals to Fine Fate
  2. Limited trading capacity as a result of not being part of a free trade agreement.
  3. The evidence of limited trading capacity as a result of not being part of a free trade agreement.
  4. Agreements are to be respected
  5. Having a FTA with a “richer” country is, in fact, a reason to be secure
  6. All the countries in the world cannot be equally powerful, but they may be equally free.
  7. Opposition Summary

Free Trade is

Yes because…

Free trade is the process of liberalization of market from governments’ interventions. Under free trade policy, all economic resources from all countries involved are subject to price as a reflection of supply and demand, thus making price as the sole determinant for resource allocations.

The characteristic of free trade are:

1. Trade of goods without taxes or any kind of barriers

2. The free movement of labor between countries involved in the agreement

3. The free movement of capital between and within countries involved in the agreement

4. Free access to markets

Free trade ensures the same playing rules for a competition, although does not necessarily ensures a fair competition for all the parties involved.

No because…

The opposition side wants to clarify some of the characteristics for free trade that the proposition has set.

If our object of debating are the free trade agreements and their benefits, then we have to make clear that transnational labor movement, free movement of capital and free access of markets are not necessary characteristics of free trade agreements (our debating subject) and they can just be measures taken by parallel documents and so, even though they could help us prove beneficial effects of free trade agreements, are not a characteristic of FTAs as such and we have to debate under the real meaning of the concept we are discussing.

However, we also want to note the remark that the proposition has made, by recalling “Free trade ensures the same playing rules for a competition, although does not necessarily ensures a fair competition for all the parties involved.” This key point will help us prove how free trade agreements provide a fair competition and how an apparent disadvantage to certain sectors is only a misconception since the most important aims of free trade are to be achieved through both, the theory and practice, of the law of comparative advantage, leading to an equilibrium point with a win-win negotiation perspective.

The appliance of the stated law and division of labor are two characteristics that define free trade agreements and help explain why its final aims are the income increase and well-being of the involved countries and their citizens.

Free Trade is not Fair Trade

Yes because…

Free trade creates an equal business environment. By signing the agreement, countries will put their private sectors to compete with other countries’ private sectors in equal terms. For poorer countries, it means their private sectors – whom are relatively weaker – will compete against much stronger companies. The regulation may be equal, but the players capabilities are certainly not. It would be like a football match between Manchester United and Malaysia National Football Team – there might be a level playing fields, but Manchester United will still win every time. [[http://www.the90thminute.com/index.php/soccer/2009/07/manchester-united-defeats-malaysia-xi-national-team-3-2-2-0-recap-and-video-highlights/]]

Without the government intervention, the private sectors, commonly farmers or small companies, will fail to protect their production. It happened in Senegal, when it open its market, and should lower the tariff of tomatoes during 1994 to 2001. The country was producing about 73,000 tonnes of tomato concentrate by 1990. In 1996/7, hitted by the imports from EU, the production decreased to 20,000. The EU’s exports of tomato concentrate to Senegal increased from 62 tonnes in 1994 to 5,348 tonnes in 1996 due to the increased access to Senegal’s market (an 8625,81% increase). Since then, there has been stagnation in Senegal’s tomato processing industry with declining prices of tomato concentrate and a lack of credit and investment resources available to processors.

The EU farmers, on the ther hand, have easy access to credit and qualified labour compared to the Senegalese counterparts, and they are able to produce tomatoes more cheaply for the European processing industry. Moreover, in 1997 alone, the
EU paid out US$300 million in export subsidies to tomato processors. [[ http://www.ivcs.org.uk/ijrs/April2007/Effects%20of%20market%20liberalisation%20on%20rural%20producers.pdf%5D%5D

This example of Free Trade comes to show how countries that does not have an equal competitive advantage are expected to play against a more stronger player and, in the process, failled miserably.

However promising the benefit of Free Trade the richer country claims, the reality shows that inherently Free Trade is never a fair ground to compete and therefore should be abandoned.

No because…

It is quite obvious that certain competing industries among countries will not have the same means (ranging from economical to technological) to compete with those of other countries and so, that is why certain policies and measures can be taken by countries under the free trade zone but recognizing national sovereign policies regarding competition policies.

The Association of South East Asia Nations (ASEAN) gives a clear example on how their agreement contemplates certain disadvantages from one nation’s industry to another and so respects sovereign right to enforce own competition laws. Recalling Article 1 of its Chapter 14:

1. “The Parties recognise the importance of co-operation in the promotion of competition, economic efficiency, consumer welfare and the curtailment of anti-competitive practices.
2. The Parties recognise the significant differences in capacity between ASEAN Member States, Australia and New Zealand in the area of competition policy.
3. The Parties respect the sovereign rights of each Party to develop, set, administer and enforce its own competition laws and policies.
4. Nothing in this Chapter requires a Party to develop specific competition related measures to address anti-competitive practices, or prevents a Party from adopting policies in other fields, for example to promote economic development. “[1]

Taking into consideration that industrial structures of states in the same region are similar, there will always be a fluctuation on export and import even when it is minimum, but not having a variation is practically impossible whether there is a free trade agreement or not.

As a clear example of the same ASEAN region we have Thailand, which after a bilateral FTA with China, “increased on 117 percent for apple imports, 346 percent for Chinese pear imports and 4,300 percent for grape shipments. However, they also experienced an increase of 986 percent for fresh longan exports, 21,850 percent for durian exports, 1,911 for mangosteen and 150 percent for mango.” [2]

This statistics show that a free, international, competitive market will produce a productive specialization and these enterprises “would become globally competitive with their own niches in the world market”. The income in Thailand has been greater than the outcome and Thailand has thus, increased its Gross Domestic Product. Other countries in this position will obtain a greater income and that money could be invested in less competitive industries and the investment on education, infrastructure and a further creation of jobs in the same and other markets, including those where they have a comparative advantage.

Manchester United will beat the Malaysian national football team, but Lee Chong Wei will beat the full British Badminton team all by his own.

The gains from free trade outweighs the costs, by far.

1. ^http://asean.fta.govt.nz/chapter-14-competition/
2. ^http://www.aseansec.org/17310.htm

Free Trade is not Free Trade

Yes because…

“The measure of the wealth of a nation is indicated by the measure of its protection of its industry; the measure of the poverty of a nation is marked by the degree in which it neglects and abandons the care of its own industry, leaving it exposed to the action of foreign powers.” – Congressman Henry Clay.

The price for a free trade is more expensive than the benefit it brings. The practice of free trade agreements will undoubtingly give market access to much richer country. This then will, so they claim, give chances for poorer countries to attract investment and improve growth prospects, and in some cases, even expand their own corporate sector – a fine answer for all the problems in this world.

However perfect it may sound, the hypothetical condition can only be valid in a circumstance where particular industries in the poorer countries has comparative advantage. In truth, most of the companies does not have (if any) comparative or competitive advantages. Being so, these companies whenever a free trade agreement is applied, left alone to compete without government’s protection, will never develop and then in the long run will die.

Harsh reality portrays that after a country opens their market, the first sector to suffer is the employment sector. Poorer countries will find their skilled workers moving to greener pasture (Seeking higher wage) thus leaving the workforce inside the country being cheap labor (the main attraction for foreign companies) [[http://www.dollarsandsense.org/archives/2003/0103dollar.html]]. Meanwhile foreign corporations will also compete for commodities with higher financial capital and stronger purchasing power, raising the living standard of the whole poorer country’s society. No matter how beneficial it might seem by getting access to the new market, the practical thing can differ so much because free trade premise is based only on the potentials that can be reaped, but not on the technical requirements that need to be fulfilled before it can reap the potential.

No because…

“Freedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself … Economic freedom is also an indispensable means toward the achievement of political freedom.”

Milton Friedman

It seems that the proposition is focused on repeating that free trade as an agent of globalization is going to end marginalizing poor countries, but what they have not mentioned is that free trade has far much more benefits than problems.

First of all, the proposition says that free trade is more expensive for the benefits it brings. Well, I would like to ask: What is the price of bringing a “third world” (now that we are using the word “poor”) country into the developed world? Free trade would not only support development in poor countries, it would also spread technology and knowledge from the so called “rich country” so that it is available in the new nation and thus it is useful for the natives of those countries. In a period of time that may make the difference between being the target of the “oligarchy” and being part of it.

Completely different to what the proposition side mentioned, Free trade would warrantee the success of all involved countries, first of all because there is no self-sufficient country, and second because of the great diversity of the world, every nation has something to that makes it unique and special. It is for this reason that producers and consumers get satisfied, but also it is the reason for us being proud of selling Tacos all around the world.

Free Trade is not Fair Trade (opposition example)

Yes because…

Before we continue this debate, firstly we would like to acknowledge the effort from the opposition when they cite ASEAN on its “commitment” supporting a fair FTA. It just comes to show the “distance” the opposition has to go into arguing a” fair” FTA, as oppose of using any examples from the NAFTA agreement or the recent EU – Mexico “Global Agreement”.

However we would like to argue that although the ASEAN document showed their “commitment” in conducting a “fair” FTA it shouldn’t be used as proof for an argument. Why? Simply because citing ASEAN, an FTA advocate, would be a biased source. We from the proposition wouldn’t even be surprised if there is an ASEAN document that goes to claim that FTA would feed the poor, heal the blind, or even cure cancer.

This proof of bias was evident in the claim from an ASEAN document, cited by the opp as proof for their argument – The Thailand Phenomena. The document claims regarding Thailand’s economic success due to the FTA with China contain misleading numbers.

While the documents highlights high percentage number of growth it did not showed inside the document the economic indicator of Thailand after the FTA, here is what the document is missing [[http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001]]:

1. Inflation rate in Thailand rose every year from 2003 – 2007

2. Growth rate of the GDP decreased every year

3. Thailand’s account balance decreased from 8 trillions USD to deficit 4 trillion USD in four years (a 150% decrease of their account prior to the FTA)

When in contrary China enjoyed a steady increase in their account balance of 400% in those same four years.

While Thailand, sadly to say did not increase their GDP (despite the percentage of increase of all the durian, mangosteen, and mango they enjoyed). Thailand did not come as a valid example from the opposition; on contrast it only further proves that Free Trade is not Fair Trade.

Having cleared the opposition’s “Thailand example”, we would like to take in the Thailand example as a supporting evidence for our argument that Free Trade is not Fair Trade.

We would like to extend the invitation to the opposition to provide a more sustainable argument with proof how FTA would bring more benefit than harm.

No because…

First of all, we have to recall that this agreement between China and Thailand was only in charge of a free trade related to agriculture and so, it is the agricultural market the want that we have to analyse and it has been on this sector that the exports have been larger than the imports and the industries have grown.

Inflation rate and the GDP change are altered due to many different factors, but the trade balance is not the only macroeconomical factor to which we can attribute gains or losses on the GDP, but it is the necessary measure to take if we want to activate the possibility of having exports.

Thailand’s economy is largely based on agricultural products and their Free Trade Agreements have been succesful on this market (where Thailand is the World’s number 1 rice producer) and that was one of the main reasons that lead Thailand to sign further free trade agreements with Australia, India, South Korea and Japan and they have all been very succesful: The 2008 Thai shipments destined to Japan were valued at 625 billion baht, a great revenue por Thailand. This free trade agreement made Japan Thailand’s second export destiny…And Thailand has a lower GDP than Japan, by far.

It is not our objective to analyse Thailand’s economy as a whole, but as for what FTAs are concerned, Thailand is now an advocate of free trade agreements and that is because this treaies have been very succesful.

Free Trade is not Free Trade (opposition as an example)

Yes because…

This debate has been set by the proposition to make a wider case for FTA. It is not only about poor countries who should not engage in FTA but for countries in general who are poorer compared to their trading partners.

If the opposition feels that this debate is more about poor third world countries having an equal trading terms with the U.S or the E.U for the promise of economic growth, then we want to know HOW in their arguments will FTA succeed in this. Because when it comes to economic freedom regarding the development of a country including all of its citizens, promises and assertions will not stand.

There is little or no evidence to support claims that free trade lifts people out of poverty, and it is the burden of the opposition to prove otherwise.

We however will continue to point out that there is more harm in joining FTA, that the price of Free Trade is not only far from being free instead it comes with a hefty price.

We find it appropriate for the proposition to return the favor from the opposition team (citing an example from Asia) by citing an example from South America, more specifically Mexico. We only need to look into a compelling document titled “A Warning to the Global South – The EU – Mexico Free Trade Agreement Seven Years On” [[http://www.tni.org/reports/altreg/eumexicofta.pdf]] to confirm the harm of FTA.

In the year 2000 Mexico signed a “Global Trade Agreement” with the EU, which the WTO applauded as “the first, the fastest and the best” FTA agreement in the world. In the agreement the EU managed to persuade Mexico to deregulate 95 % of their goods and service industry. The EU at that time claimed the agreement not only as a representation of trade but for “regional development” in South America. Mexico circa 2000 AD was becoming the beacon of social and economical success by opening itself to the EU.

However, as advocate of the FTA, making promises and unsubstantiated claims are always easier said than done. As reflected in the reality after the FTA, the condition speaks for itself [[http://www.tni.org/reports/altreg/eumexicofta.pdf Page 28]]:

1. GDP Growth in Mexico during the first three years of the agreement was only 1%

2. Mexico currently suffers from a growing trade deficit with the E.U

3. Mexico trade balance deficit has risen 80% since the EU – Mexico FTA went into effect

4. High concentration of investment from foreign investment now controls the economy

5. Lack of job creation by foreign companies kept the rural area of Mexico undeveloped, and

6. Basic service companies (water and electricity) has been denationalized to foreign corporation

7. The presence of European companies in strategic sectors such as water, electricity and banks has not promoted enhanced quality, rather, on the contrary, an oligarchic market with high prices and widespread abuse of consumers.

The example of Mexico also showed that although FTA opens the opportunity to enter a wider market (the EU) it is not in the same playing level, as the main export of Mexico is only oil and the main export of the EU are banking, electricity, water treatment, car manufacturing, and so on.

When using Mexico as an example, it becomes evident that the loss of their basic sectors, the lack of employment, the control of the economy by foreign corporation, and the deteriorating trade situation of Mexico is, plainly speaking, an expensive price to pay for the promise of “economic growth” the opposition uses as an argument. Instead according to the example stated, the promise of growth was non existent.

This example should be not only be a warning for the south american continent but for every country who are already or are in the process of joining a FTA.

No because…

First, we have to clarify that México is as much in South America as Indonesia is in Oceania, so we would like our country to be referred as to be in North America, not because we prefer to be from the North or the South, but having an wrong perception regarding our country shall always be clarified.

Second, if we want to talk about out home ground, we have to tell you that some of your “facts” are not quite accurate, like the fact that electricity and water are not even privatzed and way less there is European intervention! There is null intervention from any other country regarding our water and electricity.

Just as on our Thailand example, we have to state that the GDP is affected by every macroeconomical value and not only the inversion, but we will prove how the EU – Mexico Free Trade Agreement has brought more good than harm.

More than 80% of México’s international commerce is done through a frame of free trade, making our country one of the major goals for international investment. This investment projects México as one of the World’s top 5 economies in the World within a period of 40 years.[1] Then who will be the poor guy?

Now, going directly to results of the FTA with the EU. Talking about “poorer countries”, México would take the paper of “the poor” here. However, México took certain advantage and Mexican products enter free of tax to Europe since 2003 and the Europeans to México since 2007 (and the proposition side wanted to argue results of 2003…).

From 1999 to 2008, México-EU exports had increased 209%, Imports had increased 157% and the total commerce increased in 172%. Of course in 2003 there was a growing trade deficit, since the Free Trade Agreement hadn’t fully been implemented and the trade balance is favorable to México.

Fuels are, as the proposition said, the main export of México. However, 73.5% of the exports are not even fuel exports and in fact, 24.9% of the exports belong to products of the automotive industry. Other important soures of export include consuming goods and chemical products, so noth, offer and demand, are quite high and revenue positively to our country.[2] It is in 10 products that México is one of the 3 major providers to the European Union.

The results are clearly favorable to “the poor country”.

“The loss of the basic sectors”, ifit exists, clearly is not an effect of Free Trade Agreements, since the major importing prodcuts are Non-electric machinery and chemical products but the major national problems are based in lack of infraestructure, which has been developing quite fast with the need of international investment and the NAFTA.

This prove can give us another very good and clear example on how the countries with a lower DGP can have more monetary benefits than those that have a greater GDP and how they foster development of a country, in this case of what we need most: Infrastructure but we also make it clear that it is not about who wins and who loses, but how both countries have benefits and poorer countries have more benefits that justify their free trade agreements, which builds our case.

1. ^ http://www.cronica.com.mx/nota.php?id_nota=349914
2. ^ http://www.dialogopoliticaexterior.org.mx/archivos_index/ueuro/080918%20Sria-Econ-evaluacion%20y%20oportunidades.pdf

Free Trade is not Fair Trade: Corporations reaps the benefit more than host country

Yes because…

We would like to further emphasized why Free Trade is not Fair Trade.

When a FTA is signed both country’s market is liberalized, it is the corporation from the stronger country that will first move to take it’s position.

The FTA practice in a country is only as good as the corporation that enters the country. When we look at past experiences, we can all see that the conclusion is “not good”. These behemoth are not interested in the “regional development” or “democratic clause” both trading country committed into in the agreement.

These behemoths of trade saw these FTA as merely an act of taking maximum profit in a new emerging market.

“”Ask anyone who has worked in a corporation and they will tell us that corporations are only interested in “making profit”.””

In fact, as summarized regarding the EU – Mexico “Global Agreement” it has been stated that “The EU-Mexico FTA has mainly helped European companies by lowering their production costs and enabling them to use Mexico as a platform for shipping goods to markets that have greater purchasing power, as well as higher income markets in Mexico “

How can we show that these corporation aims for profit rather than the interest of the host country? We only need to set one example in the form of the Nestle Corporation. Nestle has enjoyed enormous growth during the early 1990’s when many trade barriers crumbled (Mainly in Africa and South America). During these growths, Nestlé’s atrocities are listed from farmer exploitations, union crackdown to the famous unethical marketing of Nestlé’s baby milk that has been linked to the death of 1.5 million deaths of infants in Africa. [[http://www.corporatewatch.org.uk/?lid=240#pollution]]

Even recently, Nestle has clearly violated the sovereignty of Ecuador’s Labor regulation when it openly fires 13 employees on the basis that they are involved with a union. [[http://www.rel-uita.org/sindicatos/rel-nestle_ecuador-eng.htm]]

A vivid case of this argument existed in, again, Mexico where corporation interests are placed ahead of the worker. When continental tires took over a tyre manufacturing plant in mexico, they applied new rules in their profit making mechanism which included:

1. 12 hour work a day

2. No sunday off

3. No profit Sharing

4. Increased output without pay raise

Enraged since the new foreign buyer has clearly violated the law, the worker went on strike and left the factory to shut down. Going to local authorities, The Local Conciliation and Arbitration Board, which is charged with resolving conflicts between workers and owners to report the situation. They were then surprised when shamelessly the board took sides with the owners and declared the strike illegal, refusing to recognise its validity even though the owners had violated the law [[http://www.tni.org/reports/altreg/eumexicofta.pdf page 22]]. This is merely one of the many examples of the abuse that has happened in countries applying FTA.

Our point is, a country can never deregulates its market for the promise of “economic development” then open it’s infant market to compete with big corporations. Especially when there has been rampant case of abuse by major corporation taking advantage of the FTA, whose sole purpose is to “make maximum profit”. This is a risk countries should take on assessing the benefit of FTA, where we have clearly shown that it cause more harm than the benefit it promised.

No because…

The two cases mentioned by the proposition are isolated ones, we believe that the still ambiguous case of 13 workers out of 4, 500 000 people (the economically active population of Ecuador) [1] is not representative, the same goes for the Mexican case: unclear and imprecise. What is clear is that the proposition is just looking at a small part from the whole, or at least that is what can be inferred after revising all tales of success linked to the FTA.

Take as an example Colombia, which economical development has been strongly marked by its free market politics. By 2007 the GDP grew over 8%, and is actually among the highest in Latin America, we have of course to consider that Colombia is a much more poor country than the United States of America (its major trading partner) or many others, but this seems not to have affected such amazing progress. [2]

The proposition says that “Corporations reap the benefit more than host country” but in none of the two examples shown in this section they achieved to demonstrate how do this “Machiavellian intentions” affect the finances of a country, and if this does not hapen then we may say that both instances lack relevance. Instead the Colombian case constitutes a wonderful contribution for showing that no mattering how long is the breach between two countries, free trade brings good news.

[1] http://www.argenpress.info/2009/07/panorama-economico-de-ecuador.html
[2] http://www.dane.gov.co/files/comunicados/cp_pib_Itrim07.pdf

Free trade is not Free Trade : Labor welfare for the price of macroeconomic indicators growth

Yes because…

The free trade foundation is of comparative advantage. The countries that are involved should have a significant comparative advantage against its partner. This model should work perfectly if the agreement is exclusive between only two countries.

So, for example Country Y, which has a comparative advantage in commodity A, B, and C, while Country Z, which has a comparative advantage in commodity D, E and F, the two countries can sign the agreement and shares the advantage of global trading.

But Adam Smith, contrary to HC Andersen, could never guarantee a happily ever after ending, because unlike marriage, free trade agreement is not monogamy. Country Y, can also sign a free trade agreement with country X, which supplies commodity E, G, and H. It (Country Y) could also sign an agreement with Country W, which supplies commodity E, I, and J.

So now, country Z, X, and W will compete in the market of country Y for the same commodity (E). So there is now a competition between them. But, what is wrong with the competition, isn’t all trades involves competition?

Following opposition’s assumptions, given that consumers tend to choose the cheap between the convenient (scroll down, see No point 3) [[http://debatewise.com/debates/1053-poorer-countries-should-abandon-free-trade-agreements]], the competition between country Z, X, and W will become a “race to the bottom”, where the condition causes the reduction of price to its lowest level.

If they are richer countries that can subsidize their commodity there will be no problem. For example, Europe with its Common Agricultural Policy [[http://ec.europa.eu/agriculture/publi/capexplained/cap_en.pdf]].

For poorer countries, to preserve profits while keeping its competitiveness in unreasonable price, the only option is to lower its labour wage. Chile, as an example, is proud of its status as one of the most open countries in the world. It has signed 47 free trade agreements. [[http://www.oxfam.org/en/campaigns/trade/real_lives/chile]]

In the agricultural industry, Chile exports products such as grapes (for wine), fruit, and salmon. The cost that Chile has to pay to preserve profit for transnational companies is an increased insecurity for millions of women workers; being paid below minimum and losing their labour right.[[ibid]]

In the fruit-picking sector, 75% of women work more than 60 hours a week in season, on temporary contracts, and a third of them do not earn even the minimum wage. Half of these women have no contract, and therefore there is no welfare system to support them if disaster struck.[[ibid]]

This is also evident in China with its textile industry. Minimum legal wages in the developing countries hovered around US$30-50 a month. This is equivalent in China to 240-400 RMB a month. The legal minimum wage in Shenzhen, the Chinese city with the highest minimum wage, is only equivalent to US$42. China has set its minimum wage standards very low, to the point that it is even compete with Vietnam and Cambodia – two countries where the cost of living is lower than in China. In Mexico, El Salvador and Nicaragua, the wage levels are slightly higher than Asian wages, but this competitive disadvantage is largely cancelled out by the proximity of Central America to the American market, the biggest market of textile. [[http://rspas.anu.edu.au/~anita/pdf/AChancp461.pdf]]

China biggest competitor for US market is Mexico; today China and Mexico are competing neck and neck for the American market, each supplying around 15% of all apparel imports to the US. [[ibid, p3]]. Mexico, having their status as a country with FTA with the US, enjoys the advantage of geographical distance to the US. Along the US-Mexican border assembly plants called maquiladoras have mushroomed, employing about a million migrant workers in various labour – intensive industries. This number is still small compared to the 12 million in Guangdong province alone, but, justifying opposition’s claim on growth, it represents a 150% increase in Mexico since 1990 [[The Economist, July 7th 20 01, pp. 27- 30]].

The 150% increase is huge for an economic indicator, but align with our a priori before, the increase did not affect labour wage. The minimum legal wages in Mexico are almost double compared to Shenzhen, and this produces pressures on Mexican wage trends. In the manufacturing sector, real wages dropped by 20% during the 1990s. According to the ILO’s estimate, the migrant workers’ wages in Mexico’s apparel industry shed 28% of their purchasing power in the period between 1994 and 1999. [[http://rspas.anu.edu.au/~anita/pdf/AChancp461.pdf]]

This is the bitter reality of free trade, which fails in increasing labour’s welfare, as a price of macroeconomic growth. Mexico is one of the countries that aware with this problem. That is why Mexico was the last country to sign a FTA with China, delaying China’s entry into the WTO. Mexico perhaps by now knew by learning from past mistakes, that when the trade barriers are removed, it would have much to lose. But the international pressure was too great for Mexico to stand its ground. [[ibid, p4]]

No because…

Once more it would be wise to question the proposition’s information: Nowadays Chile is not just recognized for its economic achievements, it is also sighted as one of the countries with highest quality of life, lowest perception of corruption and lowest poverty rate in Latin America [1]. If the alleged alarming numbers about exploited women were true, how would all of this qualifications for Chile be truth?? The example (assuming it is veridical of course) falls again to illustrate the relation between the intensive and autodestructive competition and the completely different and hypothetical situation of Chilean workers, in this case competition is useful for ensuring the high quality of the products.

More in important than this is that non of the following examples provides a link between the boost of the economy and the decrease in the labor welfare, there is not even a logical reason for this to happen, incomplete information, and confusing data. Can this argument be taken seriously?

[1] http://imf.org/external/pubs/ft/weo/2008/02/weodata/weorept.aspx?pr.x=37&pr.y=17&sy=2007&ey=2007&scsm=1&ssd=1&sort=country&ds=.&br=1&c=213%2C263%2C268%2C273%2C218%2C278%2C223%2C283%2C228%2C288%2C233%2C293%2C238%2C243%2C248%2C253%2C298%2C258%2C299&s=NGDPDPC&grp=0&a=

Free Trade is not Free Trade: Industry specialization is the price that outweighs the benefit of FTA

Yes because…

The opposition tried to defend the case of FTA based on the logic that even though there will be natural selection in the private sector competition, but each sector will have a winner. And from that fact, it is sufficient to claim that FTA offers more benefit, often in the form of industrial structure becoming more specialized. There are at least two points that we think why this view can be extremely dangerous.

First is the logic of minimizing your risk to ensure sustainability of economic growth by spreading your risk. The opposition used the example of export growth of Thailand’s durian commodity as the success of FTA. Our question is what will happen if say there is a significant drop in durian’s price? What will then happen with Thailand economic growth, if Thailand’s only reliable private sector is from the durian sector? We believe that the opposition example of the economic growth experienced by Thailand through the path of becoming specialized in its development confirm that free trade is not free after all.

Second, if in many examples in Africa, a lot of its local industries died because they have not matured when they were exposed to foreign competition. As a result of this, those that survived become too specialized while the others went extinct. The opposition claimed that this will still result in positive gain, but we believe not only the net gain cannot be measured, hence cannot be ensured if positive gain does exist, but also it undermines the value of democracy since the only employment that exists can only be derived from those industry that become specialized.

In other words, how can we guarantee the surviving sector will provide as many as employment as those who have lost the jobs from the losing sector? How can we ensure the transfer of skill from different sectors can be ensured?

Ghana is one of the example. At least 120 factories since 1988, mainly because of competitive imports. The garment, leather, electrical, electronics, and pharmaceuticals sectors have been particularly hard hit. In 1990, even the New Match Company, the only safety match company in the country, closed.[[http://countrystudies.us/ghana/88.htm]] In 2000, Ghana lost US$43 for every one of its 20 million people. In the same year, Ghana received aid worth just US$31 per person.

Over the 15 years since trade was liberalised, Ghana’s population has lost the equivalent of US$510 per person – a huge sum, given that per capita GDP in 2000 was just US$330. It’s as if everyone in Ghana stopped working for one and a half years. [[http://www.christianaid.org.uk/Images/economics_of_failure.pdf]]

As the example of Lee Chong Wei that opposition believes can beat the whole UK’s badminton team by himself confirms our notion that FTA for poorer country isn’t a fair trade. Why? Because in the correlation of our MU vs Malaysian national team example, Lee chong wei counts only as one employment, but MU can contribute to eleven employments, not even counting the secondary team. That’s why it’s not fair, we’re talking about 11 jobs as a football player against 1 job as a badminton player.

No because…

The proposition just questioned our example regarding the durian in Thailand, but again they failed to prove anything or at least establish a coherent nexus between their “Absence of free trade” argument and the mentioned example. Nowadays Thailand is a newly-industrialized country with certain prosperity on its exportations but also with a consolidated tourism identity which provides substantial benefits, the durian case was just referenced to for identifying the boost. [1]

It is also important to acknowledge that in the last years (more specifically since 1998) Africa’s real GDP has been reflecting an upward trend. As a matter of fact during 2004 the GDP grew 4.6 percent, a record for a decade [2] Is our turn to question. Doesn’t this facts contrast with the “so dramatically” panorama in Ghana described by the proposition? And also if FTA have such a negative effects in developing countries, why would Southern Africa be interested in completing the FTA launched last year? [3] Maybe the proposition would like to think twice before making doubtful statements.

And once again, we recall the GDP is a measure of 4 macroeconomical values, with just one of them being trade balanc, a factor you can only activate by opening your country to free trade.

Regarding the football comment, it is true that we may be talking about number of football players, but in that case, we can also think that in the end you will just win one game, so sport can’t be compared in that way…Or then are we weighing the Olympic medal versus a friendly match victory? The only truth is that when establishing a free trade agreement, the real competition is not the partner you are making a treaty with yourself and your capability to offer the best and be world-class competitive.

[1] http://www.guardian.co.uk/country-profile/thailand
[2] http://www.uneca.org/conferenceofministers/2005/documents.htm
[3] http://www.mg.co.za/article/2008-08-18-southern-african-free-trade-zone-launched

Free Trade is not Fair Trade: Why countries should abandon Free Trade Agreements (Proposition Summary)

Yes because…

The rebuttal and the argument so far from the opposition has only cluttered this debate. We are lost in their assertion and worst of all, their spanish citation. We would want to read their documents so that we might point inconsistencies as we did in their earlier citation, but alas with their brilliant strategy they have found our weakness.

However the proposition’s argument till this point remained unchallenged, we have stated documents (in english) that clearly reflects the current situation in Mexico yet they still claim that “There is null intervention from any other country regarding our water and electricity”. From then it comes to our conclusion that they will only read documents written in spanish [[http://instantrimshot.com/]].

In summary, what was our case?

Deregulation of markets forces medium and small business from different industries to compete in equal terms with big corporation. These will inevitably causes many business to shut down as they cannot compete with the much bigger corporation that already has an existing big markets to support their operation (as oppose to their smaller counterparts). Free Trade is not Fair Trade.

These liberalization of markets has caused unemployment, increase in trade deficit, account balance deficit, decrease in growth, and rampant abuse by foreign presence in the country. Case in point, Mexico (A warning to the global south – EU – Mexico Global Agreement [[http://www.tni.org/reports/altreg/eumexicofta.pdf]]). It is the labor, the middle, and lower class, the wheel of the economy that is being the worst hit by Free Trade. Free Trade is not Free Trade.

What has been our point? Obviously; Free Trade is not Fair Trade, and Free Trade is not Free Trade. Repetition is indeed tedious, but it does deliver our message.

Why is this bad?

Well obviously, FTA brings more harm than good to the economy (everyone should got this point by now) and it did not show any impact to development, and more importantly because the opposition failed to prove otherwise.

When the opposition release an argument such as “agreements are to be respected” it only shows their desperation in maintaining existing FTA.

Why then should this be abandoned?

Well most importantly, because they CAN abandon it and throughout this debate our examples have shown how FTA caused more harm than any benefit. Although we doubt that world leader will be persuaded after reading our arguments, because of their obvious intelligence in managing economies, the debate goes as follow:

“poorer countries should abandon FTA” and our two points (Yes, Free Trade is not Fair Trade and is not Free Trade) has shown that if FTA is signed for the sake of economic development, this debate has shown how reality beg to differ.

Having remained unchallenged, we beg to propose this motion.

No because…

Free Trade equals to Fine Fate

No because…

Our point deals of course with some of the benefits of free trade not only for wealthy nations, but for all of them. More exactly we would like to center our attention in one particular matter: The economic growth.

We all know that economic growth is a beneficial phenomenon for a nation, but what we want to highlight is the fact of economical growth coming as a result of an increase of exportations between countries. Taking into account that no country is self-sufficient we might say that reducing the commerce restrictions is a wonderful way of stimulating national enterprises to introduce their products into new markets.

International commerce is based upon the principle of exchanging national exceeding product for the national needed product, which of course is produced in another place[1]; if consumers (including countries) tend to choose the cheaper between the convenient, then we might have probed that by letting freedom act on the economical map, developing countries begin to expirience the process known as accelerated economical growth. In other words, the money machine begins to work. But that is not all, free trade also strengthens the State Law of the country by supporting multilateral relations between nations and thus making the government susceptible to international recognition[2], which is the basis of any solid administration and a leading mean of being introduced into the developed world. As you can probably notice, free trade treaties come along with many positive aspects that are shown here.

For illustrating this last argument I would like to mention the Mexican case; when the NAFTA came into force in 1994 Mexico was suffering one of the greatest economical crisis in all of its history (Tequila effect), it was the rapid growth of exportations which softened the crisis and by 1996 the economy had stabilized. The elections following the signing of the NAFTA were also the very first democratic elections in Mexico…Coincidence? It seems nt. The opening of Mexican politics towards the world made it impossible for the current party to maintain corruption in the voting process. [3]

Let’s analyze an opposite case now: Burma was at most an isolated nation, obviously it is not affiliated to any free trade treaty and it is also ruled by an authoritarian military junta, which is famous for being involved in multiple uncomfortable situations concerning the violation of human rights. When being under British rule, Burma had been one of the wealthiest countries in South Asia, nowadays however it suffers in economical struggles and it is one of the poorest nations in the world[4], this suits perfectly for introducing our next argument which will deal with the disadvantages of being left aside in international free trade treaties, this is mainly because if we were to continue in this line we might just get into the conclusion that coincidence does not exist.

1 http://www.econlib.org/library/Enc/EconomicGrowth.html
2 http://www.questia.com/PM.qst?a=o&d=74337106
3 http://www.letraslibres.com/index.php?art=6603
4 http://www.unohrlls.org/en/ldc/related/62/

Yes because…

We want pace the opposition’s centre of attention; the economic growth. If we compare Mexico’s and Myanmar’s (Burma) GDP, we can cut false assumption, case in point[[http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcoutm.cfm?SD=2003&ED=2007&R1=1&R2=1&CS=3&SS=2&OS=C&DD=0&OUT=1&C=273-518&S=NGDP_RPCH-NGDPPC&CMP=0&x=59&y=8]]:

1. Mexico’s GDP in 2003-2007, varied from 1.4% (2003), to 4.2% (2004), while

2. Myanmar’s GDP, from 2003-2007, varied from 3.0% (2004), to 13.8% (2003)

Comparing current conditions between the US of A’s “enemy of democracy” and a country that shares 2,000 miles border with US is unfair, but if we really want to take the growth rate into account, then it is clear that the free trade agreement does not give a significant upperhand.

Limited trading capacity as a result of not being part of a free trade agreement.

No because…

As promised, we will now talk about what happens to poor countries which do not take part in free trade agreements.

First things first, we must recall the basis of international commerce mentioned in our previous point: “The principle of exchanging national exceeding product for the national needed product”. Starting from this statement it would be important to remember that production involves a cost. This cost is nothing but the total money, time and resources associated with the purchase of materials or activities required for the setting up of the product[1].

The cost of a product is of great importance at the time of determining its price. Applying some simple logic principles we can assume that if the cost rises the price will rise too, so our point takes into consideration two things:

First, that not being part of a free trade agreement elevates the price of a product by elevating the cost of production. This because of the extra expenses and taxes that companies have to pay in order to get their products into another country; second, given that consumers tend to choose the cheap between the convenient, companies which are forced to increase their prices, because of the extra money they had to invest, will suffer a decrease in the demand of their products, which obviously will lead to the firm into a not so prosperous economical situation.

Summarizing, chances are being taken away from poor countries by the mere fact of not being part of a free trade treaty. We believe this is not fair. Why are we taking away from developing countries the chance of exporting competitive products in costs and prices!? Doing this is like drawing a vicious circle, the surplus of product is not sold, it stays in the country, firms start to crack, the government stimulates economy by injecting capital, the surplus of product is not sold…

Some examples that show us the veracity of what is told before are found in the embargos applied by nations in the past years, we can mention the 1973 oil crisis. It was produced by the Arabs during the Yom Kippur War, and in the following oil glut in the 1980s, the occidental countries were forced to buy oil which price had increased in a three times proportion, while the Arab countries stopped their economic development centered mostly in the trade of oil[2]. Isn’t it a high price for not being able for free trade?


Yes because…

Three points can be derived from the opposition’s argument:

1. Free trade is the only way to sell surplus.

2. Without free trade, the importer country will put unreasonable tariff barrier.

3. 1973 oil crisis is caused by the absence of free trade

The first two points can be dismissed as false, while the third point is just absurd. Allow us to elaborate.

Free trade doesn’t moves international trading; instead it is the two things called the demand and supply. So, any country that has a product surplus should not be worry, because as long as there is a demand in international market, the commodity can be sold. If the demand is low, irrespective of free trade, the sale will not be high.

This leads to the second point, where the opposition placed tariff into a wrong logic. It is important to see, that it is not the cost that counts in trade, but the profit, in exchange to the value.

Tariff is not the burden of supplier, instead the customers bears it. It is true that customer can get a cheaper price from free trade, but it is not true that the supplier could get a higher profit margin. It is also not true, that because there is tariff the exporter will get lower margin. The profit margin is relatively the same, irrespective of tariffs.

The tariff barrier from the importer country will only take the import product at a same or slightly more expensive price from the local product. A slightly more expensive price will not cease sales, because of one reason, the demand is there. The importer country will not put unreasonable tariff, also for another reason, demand. The country should make sure that it is affordable enough for the customer, so the national demand can be fulfilled.

At last, regarding the point of the 1973 oil crisis, we do not found the idea on how free trade will make Arab still sold oil to Israel’s ally during the war. If the opposition could prove this, we, willingly, will promote free trade as a path to world peace (poorer countries excluded).

The evidence of limited trading capacity as a result of not being part of a free trade agreement.

No because…

In a desperate attempt to rebut our argument, the proposition managed to identify three “vital” issues which, to their broad view, are false and is some cases just absurd. Let us complement the other side’s ideas by mentioning some of the facts that the proposition unfortunately forgot to mention, this with the obvious purpose of leading the audience into a more objective and complete perspective.

First of all, the proposition states that free trade doesn’t move international trading, but that is abruptly overshadowed by the action of demand and supply. Sadly, and a little bit coincidentally also , they failed to mention that the model of supply and demand is part of microeconomics and that it hardly interferes drastically in macroeconomics matters (having said we may infer that it is even harder that it becomes of vital importance). If the model of supply and demand was to intervene in international trading, it would do so under the directly dependance of global trading laws (in this case FTA), what the proposition should remember is that we are living in the 21’st century and that economics as well as humankind itself evolves at a high speed rate. The result of this first proposition statement may be resumed into a confusing critic which not only lacks relevance for the topic, but also shows us the unsupportable and flawed posture that the proposition has taken.

The same criteria may be applied for the tariff barrier comment made by the other team. We would like to stop and quote the proposition: “The country (importer) should make sure that it is affordable enough for the customer, so the national demand can be fulfilled.” Empty words. We would like to mention that the state is not the responsible for assuring the prices are appropriate for the consumers, and we also do not understand why the proposition is so committed into getting a weird mix of economic laws, if since the beginning the proposition has been defending the inexistence of FTA advantages, then there shouldn’t be contradictions in its speech; we invite the other time into making a complete research of the events, and thus providing a much more coherent discussion.

Finally we thank the proposition for offering their help in the promotion of our cause, but reject the proposal. We believe that the fact of a dozen of countries being plunged into near-bankruptcy because of the 1980’s oil glut is more than enough proof to show the catastrophic effects that the absence of facilities in trading can cause [2], that the fact of loss in revenue for the Arab members from the OPEC resulting in “The Mother of all Battles”[1] constitutes sufficient evidence for proving the importance of free trade and commerce in a peacebuilding effort, but more than that we believe that all the countries in the world cannot be equally powerful, but they may be equally free, and for those means we stand in favor of a reciprocal politic concerning FTA and supporting, as we’ve defended from end to end during this debate, economic development in all of its extentson and for all the world.

Our team begs you to oppose this motion.

[1] http://news.bbc.co.uk/onthisday/hi/dates/stories/january/17/newsid_2530000/2530375.stm

Yes because…

The opposition tried to rebut our argument by labeling us both absurd and false. We quote “ In a desperate attempt to rebut our argument, the proposition managed to identify three vital issues which to their broad view are false and in some cases just absurd.”

This message of our absurdity is supported by the so called economic theory from the opposition, as we quote “ They failed to mention that the model of supply and demand is part of microeconomics, & that it hardly interferes drastically in macroeconomics matter.” In the opposition’s view, there is hardly a connection from microeconomic behavior to macroeconomic matters, thus there’s no case for abandoning FTA because there is no harm thanks to no connection whatsoever.

Let’s clarify this. Indeed we failed to mention that for several reasons as listed below:

1. Of course there is relationship between microeconomic matter and macroeconomic matter. The most common macroeconomic indicator is GDP, and it is a sum of all products and services from all sectors, microeconomic, over a period of time.

2. The relationship can go both ways. Eg.: “The monetary policy from federal reserve which economist believed to have fueled the consumption binge in American housing sector by providing cheap credit for extended period of time.” Or using the opposition example of free trade in ASEAN region that the increase in export for certain products is the responsible factor in boosting the area’s GDP.

3. Both fiscal and monetary policy, governments tools in dealing with macroeconomic matters, are measures to control inflation, minimum wages, investment rate in regards to sustain growing GDP and hence employment. As we can see the existences of both policies, fiscal and monetary, is due to the acknowledgement that microeconomic policy can lead to unwanted macroeconomic situations, hence government initiatives are often required.

In other words, we didn’t mention that simply not because we do not believe that microeconomic matters won’t interfere with macroeconomic matters. Instead we do believe it does interferes closely with each other.

On the other hand, how will the opposition defend the case for the benefits of FTA when the innovations in microeconomics won’t result in any improvement whatsoever in macroeconomics situations? What is the purpose of doing FTA then, when there’s hardly relationship between those two economic disciplines?

That is why we believe what the opposition labeled us as absurd with their arguments only shows the ambiguity of their arguments for defending the case of FTA. When there is no correlation, what’s the purpose of FTA? We on the other hand believe because there is obviously clear correlation, hence there are justified risks and harms of doing FTA.

Agreements are to be respected

No because…

Even with any amount of debating time that we can have, the opposition time wants to stress how ridiculous, illegitimate and unthical would be to leave free trade agreements, not only by a “poorer country”, but any given country.

Imaginea day whee suddenly anyone can break laws, treaties and conventions. It would be a total disaster. Treaties exist to be fulfilled. They are a subject of international law and they are expressed on the maxim “pacta sunt servanda”, which means “pacts must be respected”. To suddenly one say say that all agreements (in this case, free trade agreements) are terminated is a ridiculous dream that deserve repudiation from any country that doesn’t want to fulfill its obligations…Much as criminals.

According to the (Article 65(2)) of the the Vienna Convention on the Law of Treaties (1969) states the following:

1.A party which, under the provisions of the present Convention, invokes either a defect in its consent to be bound by a treaty or a ground for impeaching the validity of a treaty, terminating it, withdrawing from it or suspending its operation, must notify the other parties of its claim…
2. If, after the expiry of a period which, except in cases of special urgency, shall not be less than three months after the receipt of the notification, no party has raised any objection, the party making the notification may carry out in the manner provided in article 67 the measure which it has proposed.[1]

That means the free trade agreements do not meet the criteria set above, so it is impossible to say all free trade agreements are withdrawn worldwide, since it would affect 2nd and 3rd parties and it is completelly illegal.

To abandon an agreement like that is simply an action degradant to the levels of Marco Junio Bruto.

1. ^ http://untreaty.un.org/ilc/texts/instruments/english/conventions/1_1_1969.pdf

Yes because…

Responding to this point is completely a waste of time, because this is far from the motion in hand. However, it is a moral calling for us to advocate that one person that agrees with our motions (that poorer countries should abandon free trade agreements). We should not make them feel as bad as Brutus (or Bruto, in Spanish).

We agree that agreement should be respected. And withdrawal from any agreement with any parties (except with the devil) act as a part of respecting the agreement, because any good agreement has a way to withdraw from it.

We are afraid that dear opposition team have mixed the meaning of “withdrawal from an agreement” and “outlawing the agreement”.

Outlaw means to violate the agreement while the party still bounded to the agreement, for example, the US steel tariff in 2002 [[http://www.nytimes.com/2003/03/27/business/wto-rules-against-us-on-steel-tariff.html]]

Withdraw, however, means that the party declared to stepped out from the agreement.

We would like to thank the opposition to cite a readable link (meaning: in English), so we could state that a withdrawal from an agreement shows respect to the agreement, and of course to other parties, as long as it is done properly.

Let us see again their citation on article 65 (yes we did read it) to cite sentences that wasn’t attached in their argument [[http://untreaty.un.org/ilc/texts/instruments/english/conventions/1_1_1969.pdf]]:

1. A party which, under the provisions of the present Convention, invokes either a defect in its consent to be bound by a treaty or a ground for impeaching the validity of a treaty, terminating it, withdrawing from it or suspending its operation, must notify the other parties of its claim. “The notification shall indicate the measure proposed to be taken with respect to the treaty and the reasons therefor.”

The first point states that it is OK to withdraw, as long as there is notification to other parties. Lets continue to the second point:

2. If, after the expiry of a period which, except in cases of special urgency, shall not be less than three months after the receipt of the notification, no party has raised any objection, the party making the notification may carry out in the manner provided in article 67 the measure which it has proposed.

The mysterious part of the second point is on “manner provided in article 67”. Then, they jump into the conclusion that “it is impossible to say all free trade agreements are withdrawn worldwide, since it would affect 2nd and 3rd parties and it is completelly illegal.” WOW.

Surprisingly, if we continue to article 67, the only manner expected on it is:

1.The notification provided for under article 65, paragraph 1, must be made in writing.

Assuming all of the governments of poorer countries are at least literate, and can submit the notification in writing, the withdrawn process should be completely legal.

Let us take Mexico as an example. According to NAFTA document, chapter 22, article 2205 [[http://www.sice.oas.org/trade/nafta/chap-22.asp#A2205]]:
” A Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.”

IF Mexico want to withdraw, technically they will not have any problem. With literacy level above 90% [[http://stats.uis.unesco.org/unesco/TableViewer/document.aspx?ReportId=121&IF_Language=eng&BR_Country=4840]], we conclude that Mexico’s government can write a notice to other parties, to make it legal. And they should not be worry that withdrawing will affect 2nd and 3rd parties, since if a Party withdraws, the Agreement shall remain in force for the remaining Parties.

So if Uncle Sam said, ” Et tu, Brute?” Mexico may reply, “read the document, it is legal”.

Having a FTA with a “richer” country is, in fact, a reason to be secure

No because…

Even if there was a legal tool to make all free trade agreements invalid, it would simply bring more harm than good.

In every single state that there is a free trade agreement (92.5% of the World’s GDP[1]) , there are industries that have been developed entirely for the sole purpose of selling them to other countries and surely, the competitive enviroment that has been created demands free trade agreements in order for a country to be more attractive to foreign trade.

In every single treaty, there will always be a “poorer” state, sincethere is no pair of states that have the exact same GDP, so implementing a certain policy would also be a very dificult task that was never addressed by the proposition side. Anyway, most of the free trade agreements are made among countries with common interests or similar economies. A vast majority of the free trade agreements are bewteen countries within a given region.

Even in cases where we can see a certain economical disparity, this states (I recall, most of the states in the World) are already used to that and there is no way we can retrocede decades to the times where we found no FTAs. As we have defended since our first point, theer will always be comparative advantage for every state in a certain market involved with a Free Trade Agreement and so, they have specialized markets on the products they can offer. The markets are used to that and so, having no free trade would totally decrease major possibilities of trade and that will demoolish industries.

As an example I can take México. I cannot imagine how could México be if it wasn’t for the NAFTA. I will not negate the possibility that the “rich” countries of United States of America and Canada may have had more benefits than México out of this FTA, but there will always be a nation with a bit more of advantage (even if it is a quarter of a centh) and that is normal.

However, it is because of the NAFTA that México could overcome the “Tequila Effect” crisis and let its economy not fall down as much as it could’ve. December, Nineteen ninety four started hard times México with a major economical crisis. Just a year after NAFTA had been signed, the United States of America could not leave their trade partners fall down and they destined thenths of thousand of millions of Dollars were sent to México (plus millions of the other NAFTA partner, Canada) and the Mexican Peso “just” fell down to an exchange rate of six Pesos an US Dollar, from the original two.

I just wonder if México had not signed the NAFTA treaty one year before…We would’ve really had very tough childhoods. Fortunately, it was a free trade agreement that let México not reverse to 1915 in matter of social and economical instability and that let foreign investment develop more industries, like the now 6th largest in the world airplane-exporter industry, the Mexican one.

All free trade agreements depend on every single partner and the fact that a poorer country has a country with a larger economy taking them by the hand should not be a concern, but a great soure of security.

An older brother will never let his small brother fall because then he would also be failing as a smaller brother.

1. ^http://www.trade.gov/fta/index.asp

Yes because…

Ah, the use of Mexico as an example again. We believe that it is invalid to use Mexico. It is just a random coincidence moved by miracles, and if you imply that it is not miracles because miracles does not happen so frequently, we are here to say that with so many “Jesus” in the population, it is possible. Lol, just kidding, our rebuttals are on the next paragraph.

As proven before that there is (of course) legal tool to withdraw from a FTA, there will be no serious harm of withdrawing from FTA, since the FTA countries only contribute 7.5% of the world GDP, and 92,5% of the world’s GDP (excludes US GDP) comes from NON FTA countries [[http://www.trade.gov/fta/index.asp]] (yes, it is the same source as theirs, they misunderstand the source, we hope it wasn’t done deliberately).

About the comparative advantage, we believe it is also clear from the beginning that we never denied that FTA gives some benefit, but we argued that the cost of FTA outweighed the benefit; security is just one benefit that are outweighed by the cost. We will not come with new examples, since previous examples on our arguments is enough for that. Our main reason can concluded in two points:
1. The overall numbers from various indicators will show deficit.
2. Even though the indicators is increased, the welfare of the poor in the countries is jeopardized.

The example for the first statement is Ghana, which receives $ 31 in aid per capita, but suffer $ 43 as a loss. [[http://www.christianaid.org.uk/Images/economics_of_failure.pdf]].

For our second point, comes Chile, which is praised by the opposition as the highest-of-everything-good and the lowest-in-anything-bad [[http://imf.org/external/pubs/ft/weo/2008/02/weodata/weorept.aspx?pr.x=37&pr.y=17&sy=2007&ey=2007&scsm=1&ssd=1&sort=country&ds=.&br=1&c=213,263,268,273,218,278,223,283,228,288,233,293,238,243,248,253,298,258,299&s=NGDPDPC&grp=0&a]]. but they close their eyes to situation where millions of women workers being paid below minimum and losing their labour right [[http://www.oxfam.org/en/campaigns/trade/real_lives/chile]]. It is a tragedy of modern civilization, where the wealth of a country was built above the agony of poor people. The irony proved that FTA failure for poorer countries is a systemic failure; even one of the most success countries cannot overcome it.

Back to Mexico, our stance is still the same. We cannot negate history, and we will never able to give example where Mexico could survive the crisis without NAFTA. We admit that FTA secured Mexico on 1994. But the security there is still outweighed by the cost.

For the feeling of security, Mexico trade balance deficit has risen 80% since the EU – Mexico FTA went into effect. If it is regarded as an “OK” situation by the opposition (because according to them, “there will always be a nation with a bit more of advantage (even if it is a quarter of a cent) and that is normal.”), it cost Mexico welfare problem, as example shows that lack of job creation by foreign companies kept the rural area of Mexico undeveloped, and high concentration of investment from foreign investment now controls the economy. (please refer to “Free Trade is not Free Trade (opposition as an example)”).

By this point we want to emphasize that free trade is not free at all. It cost the poorer countries its economic control. They may argue that losing small part of economic control is just a loss of little liberty, but this little liberty caused inability to provide welfare, and a less control because the industry specialization narrowed the industry fields, which may caused problem for skilled workforce to adapt. In other case, competitive sectors also unable to absorb workforce from uncompetitive sectors. This will increase unemployment, which may cause social problems.

At the end, if we sum the benefit from the loss, we will still see a total loss, without any benefit. Summed up wisely in a quote:

“Any society that would give up a little liberty to gain a little security will deserve neither and lose both.” Benjamin L Franklin. [[http://es.wikipedia.org/wiki/Benjamin_Franklin]]

All the countries in the world cannot be equally powerful, but they may be equally free.

No because…

The proposition team has been defending the idea of a totally unfair trade during this debate. In this point we would like to make special emphasis into identifying the real issue which is not fair trade vs. unfair trade as many may think, but equality vs. justice.

On a directly macroeconomical benefit, we can state that every country is to be free to activate one of the 4 values that increase GDP, this one being the trade balance, which in the faborable case (exports) can be majorly fostered by the activation of free trade itself.

So, lets consider equality as the condition accomplished when the values of two or more independent elements consolidate an equalitarian relationship, and lets apply it into our topic by analyzing first the definition of equality that the proposition so kindly has implied in its respective speeches.

We understand from the proposition’s posture that equality is the compensation of disadvantages or advantages between different products by effect of international regulatory means, in other words trading laws should provide protection and aid undeveloped countries in their onslaught against superdeveloped countries for a common market and thus assure the same possibilities of being sold for all of them. Our own definition of equality deals instead with ensuring leveled conditions in the international field so that the consumers may judge the product by its intrinsic characteristics and thus make a selection based on what really best suits to the situation. The opposition (us) team has also been defending justice which is based upon the principle of getting what is deserved [1].

Now we will speak of the importance of equality. No matter what definition of equality we choose we must agree that it guarantees the protection of national interests and companies, but in order for equality to carry out that vital function FTA must take into account what the parameters of equality are, of course no one can determine that and this is for one simple reason: “Countries in the world cannot be equally powerful, but they may be equally free”. By establishing a judgement in which one country is forced to trade within a default trading limit, not just we are violating its sovereignty, but also denying its right to be equal. This is why applying the first definition of equality included in this entry may lead us into a dangerous way of thinking, and this also proves that the essence of being equal is found in giving the right to each country of seeking equality by themselves. International laws must then offer leveled conditions in the international field. And because of this justice is the real issue to debate here, because the sense of equality in each country varies depending on what they consider is fair for them, what they think they deserve, and no nation (no mattering how poor it is) should have forbidden that right.

Equality is quite much important, but in order for equality to be that much important a complete sense of justice is needed. It is by proving that the dependance of equality from justice is undeniable, that our point shows to have defended more noble ideals than the proposition’s one, and because of that we might have won this debate so far.

[1] http://www.seop.leeds.ac.uk/entries/justice-virtue/

Yes because…

“All the countries in the world cannot be equally powerful, but they may be equally free.” It rhymes well, but gives us no reason not to abandon free trade agreements.

We wouldn’t even considering giving a rebuttal, but then again we do have some tile left. Even though it’s not perfect, but hey so does bilateral agreement between states.

Ok, sovereignty. We should clarify the opposition’s misunderstanding on sovereignty concept. From their argument, they stated, “By establishing a judgement in which one country is forced to trade within a default trading limit, not just we are violating its sovereignty, but also denying its right to be equal.”

Sovereignty concept is affiliated to territorial. For example if country A put limitation on commodity X trading in Country B, it violates sovereignty, but if country A put limitation on commodity X imports in its country that comes from country B, it solely the sovereignty of country A, because the government has a right to regulate things under its territory. Country A do not violate Country B sovereignty and country B should respect it as Country A sovereignty.

Now, back to the case, we should see first the aim that a country should serve. A country is formed by a social contract by its citizen, where individual person give up some rights to a government or other authority in order to receive or maintain social order. When we talk about country and its policy, this social order should be put as first among others.

We believe that any country should maintain social order to achieve the highest objective of the country, the welfare of its citizen. Justice and equality is just an attribute to maintain social order, so the welfare can be achieved.

From this bigger picture, we can see that equality is not the purpose on itself, but it serve higher objective, that is the welfare. The model of equality that is given by the opposition is was proven by our arguments as harming the social welfare. That is why, being equally free is not as cool as it rhymes.

We believe that by not joining a free trade agreement does not cause inequality between the countries. In fact, by not joining FTA, countries has more freedom in deciding what is best to its country. FTA makes the country loss its flexibility to adjust their trading policy to current domestic situation.

The oppositions urges us to be equally free, but what is the purpose of being equally free? Just to have a noble ideals? Our reasons for their arguments is always the same, there are expensive cost that should be paid, and it outweigh the benefit. We are not interesting in explaining it again, it is already well explained.

In short, it is not about whether our proposal are noble ideals or not, it is about whether it would bring better welfare or not to the citizens, the value we profess is far more worthy.

Opposition Summary

No because…

First and foremost, México wants to express its most sincere sympathy to Indonesia and every moral support regarding the tragedy that struck your country this week.

However, the show must go on and we have to conclude this debate.

This debate was about if poorer countries should abandon free trade agreements and the debate centered in the following clashing points: Whether Free Trade agreements are fair or not and whether FTAs bring more benefits to poorer countries. Moreover, the opposition side also analyzed the effects of poorer countries leaving free trade agreements, a main point that was not addressed by the proposition and was the case they had to make. The opposition proved the results would be worse and so, leaving FTAs is not an option at all.

We then proceeded to another argument: How limited trading capacity was limited when not being part of a free trade agreement and we also presented its evidence. When no free trade agreements are put, it is more difficult to access the market and when there is FTA, there is a better offer in cost, which will lead to more commerce and thus, competitivity for better consumption and so, a better profit with more sells. The oil crisis of 1973 is an evidence that not having facilities to trade can put countries in near-bankruptcy, while in a later point we would go on to proof how an FTA would save you from so. And what is a better facility to trading than FTA.

In the beginning of the debate we argued about all of the benefits that free trade brings to us. We talked about economical growth and how it is stimulated by the FTA, more important than that we proved, by referring to the Mexican case followed by a brief description of the situation in Myanmar, that the main difference between two nations is not found in economical status or political regimes, but in the measure of freedom that all of the countries must seek in its fight for achieving identity, basically we defined one of the parameters for achieving development

Now, analyzing why the Free Trade Agreements are not even a valid option, we first gave a legal and ethical approach to the matter. Ethics are the basis of societies and breaching an agreement like the Free Trade Agreements. All pacts are to be respected and to suddenly exempt almost every single country (since almost every country is poorer to at least one other) of that is destroying international laws in general. We told you how it goes against the stipulated at the Vienna Convention on International treaties and recalled the non ethics of standing for the cause proposition is standing.

The, we proceeded to tell you how Free Trade Agreements provide financial security to the countries and in fact, help on what FTAs are for: Development and stability of the GDPs pf poorer nations and as the introduction of the debate says, it is “a promising solution for development”. We stressed how the proposition had not set out policies on when would the FTAs would be made invalid, since in every single FTA there is always a poorer country and it looks like they made their case for ending FTAs at all.

We mentioned how some national industries are created for living out of FTAs and how the World’s FTA with major disparity among involved parties (NAFTA) has not only fostered the development of the “poor” country there (México) but totally saved its economy from what could’ve been one of the twentieths century’s worst economical disasters and not only it helped development but avoided decades of undervelopment.

In general, the Proposition side tried to analyze the free trade agreement’s benefits by just taking simple statistics of GDP growth after their signings but just recalling isolated and strange historical cases, while the opposition explained recent and common cases, analyzing the direct effects of the FTA and not only the GDP, which is also affected by the other macroeconomical variables. However, when related, we did also specifically mention the effects on other macroeconomical variables, such as investment and consumption. One we did that, the proposition just tried to run their two already tired arguments of fairness and freedom in circles.

The proposition should’ve convinced everyone on the idea that abandoning free trade agreements would be beneficial to poorer countries. However, none of their 8 points addressed that…The, I should say, point and only tried to find negative spots of free trade agreements, while the opposition side did rebut and turned over their arguments of fairness and freedom and addressed how abandoning free trade agreements or not joining them would just be worse than signing them (and in fact we proved that they are even beneficial and secure. This was our case and we proved it.

It is on this grounds that we beg you to oppose this motion.

Yes because…

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3 years ago

hello i need the name of the writer

Ron Parker Pawlows
11 years ago

Why haven’t ANY Americans been speaking up with this issue on this site since 1973???
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Since 1973 the United States people have been the BIG LOSERS giving away our jobs to 3rd world countries, closing unions and giving away jobs in the U.S. while these 3rd world countries produce JUNK then selling it back to America for pennies on the dollar!
By the year 2013 with the recertifications and continuing this madness the U.S. is in poverty with little to no work for it’s citizens!
BY GOD MAN! Don’t anybody understand it’s the GOVERNMENTS involved that are the REAL WINNERS here! with the GREED! taking & making back room deals while the Americans have been suffering all these years!
Remember! It was Nixon (The WATERGATE THIEF) who started all this! then the following presidents kept the ball rolling to date!

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