Is free trade the best way to beat recession?

[CHIMO]

Wildcat strikes at UK oil refineries and the international storm created by Barack Obama's "buy American" clause in his $800bn reflationary package have brought the cloistered world of trade officials out of the shadows over the past week.

The backlash against globalisation has prompted fears that the world stands on the brink of a new protectionist era.

French trade unionists have a long tradition of defending their living standards against what they see as unfair competition from countries that frown upon organised labour. The protests in Britain over the past few days suggest that the willingness to take industrial action has spread in the face of rising unemployment and what threatens to be the deepest recession since the second world war.

Policymakers are clearly alarmed by these developments. Gordon Brown, while expressing sympathy with UK workers worried about having their pay and conditions undercut by cheaper foreign workers, has insisted that there must be no retreat from open markets. There was a warning from Brussels yesterday that any special treatment from the White House for American steel and manufacturing companies would prompt retaliatory action. The director-general of the World Trade Organisation, Pascal Lamy, said last week that failure to finish the Doha round of trade negotiations would risk a new era of protectionism.
http://www.guardian.co.uk/business/2009/feb/04/protectionism-free-trade-recession

[Warpy]

1. Free trade without fair trade got us into this mess

by holding wages down and causing our manufacturing base with its attendant relatively high wages to disappear offshore.

Free trade, like tax cuts for the rich, looked appealing on paper to people who were incapable of thinking it all through, but has been disastrous in practice.

We don't need more of either.

[Veritas_et_Aequitas]

3. Some could probably think it through. They just didn't care.

The rest forgot that we're human beings not angelic beings dictated solely by reason and perfect information.

[Veritas_et_Aequitas]

2. Survey says:

Probably not. Mixed economies tend to fair well, though (some free market, some government planning).

[OHdem10]

4. Anyone who believes all these job cuts, layoffs etc are a direct result

of the Housing Crisis need to think real hard.

There is a Housing Crisis but we are in the throes of the failure
of Poorly Planned and executed Trade Deals. Mark my word, if we
magically solved the Housing Crisis tomorrow, people would still
be losing jobs. Nafta , Cafta etc simply did not work as planned
is what the Gurus would say.

Using the word Protectionism is a way to shut people up. I believe
in fair trade. There cannot be fair trade when some countries have
high wage standards and some have essentially slave wages.

Ricardo has taught us that two countries should be on a somewhat
equal parity. Example: Fair Trade could work fine between say,
Canada and US. The people in each country have somewhat similar
living standards. Mexico and US. There is not parity. UUA--much
higher wages, educational background etc. The Masses in USA and
Mexico cannot be compared. There is no comparative advantage
when this happens. First rule of Economics and Free Trade is broken.
When you start shipping jobs labor and money swirling around the world
there is no free trade. The Chickens have come home to roost.

We are in the process of having our salaries harmonized downward
in an effort to compete in the world system. Do not call it Free
Trade. Call it Chaotic Trade.

My humble advice to our Leaders, Prime Minister and all concerned.
Do you want a bigger shovel to dig us in deeper?? Or it might
be wise to consider a rethinking of this Trade Policy. They might do
a lot better if each looked at what can be done to improve their own
country's interest. Our Leaders have given away the store. Other
countries have areas they protect. Our Leaders roll over.

[Lydia Leftcoast]

7. On the other hand, Mexico and the Central American and Caribbean countries

would be a natural trade block, too.

[razors edge]

5. Trade Liberalization.

Government's arbitrary controls have not worked, and they never will. The oligarchs need to have their hand in trade to scoop some cream off the top. Power corrupts....

That's why governments prosecute the mafia, they don't like the competition.

There has never been been a free trade treaty that takes 9000 pages and 10000 Lawyers to figure out. It just isn't free trade.

Fair trade doesn't work either, because the agreements to make a country clean up it act and work on a level playing field are never honored.

If interstate commerce in the US had to go through all the same posturing, maneuvering, and political payoffs these trade agreements do, we would not be referred to as the "United" States for very long. The fact we have been able to trade freely with no state given power to penalize another has led to the conditions where we can have country wide labor and environmental standards.

[Doctor_J]

6. Since free trade is one of the major causes of it, I say no

:shrug: