USE INK EDITOR TO

QUICKLY DELETE AND

HIGHLIGHT TEXT
Jack McKeever
8th May 2017
Econ 170
Free Versus Fair—Competing Trade
1. Pick up the pen and jot a few
notes.
Theories in a Globalised Economy
2. Go to the Draw tab on the
menu bar.
Introduction
3. Select Ink Editor.
Like many theories, the idea of free trade is much more persuasive on paper than it is in practice.
4. Choose the pen colour and
Noted economist, Dan Smith, focuses on this paradox in his latest book, Trade Wars. Free trade
draw a linebut
has its obvious advantages, through
Smith the text
points out the
many you want
disadvantages and to delete. of a free trade
consequences
Free Trade and the US economy
system that are often overlooked. While free trade
promises enticing benefits, it also threatens to harm
in other areas.

Weighing the options

33%
Source: www.newsweek.com/835
6

67% 4

3
Free trade helped the economy
Free trade hurt the economy
2

The most appealing prospect of free trade is that it allows countries to take advantage of their
comparative advantage. If all nations were able to do this, each would benefit as they would be
able to specialise in the areas they excel. Smith says, in theory, that Americans “…could stay at
home in their developed economy and benefit from inexpensive Chinese goods. Whereas, in
China, the Chinese can stay home and get high-tech goods from the United States, a country with
more advanced technology, highly skilled labour and large capital investment.” (Smith, pg. 102)

Free trade certainly paints a rosy picture, but there is a downside. If we stick with the scenario
that Americans buy cheap goods from China, then there is a possibility that jobs will be lost as
they move from one country to another. Advocates of free trade would say that although jobs are
lost, new opportunities are created. Again, this argument is persuasive, but Smith points out that
in many countries, unemployment rates are high and those who lose their jobs don’t move on to
higher-wage alternatives but onto unemployment rolls.
The Role of IGOs

Political integration
Political integration is required because for an economic union to be most effective it is
USEtoRESEARCHER
necessary for all provinces be at the same stageTO EXPLORE,
of the economic cycle.

Although “provinces”ADD AND

is a narrow CITE CONTENT
description as within a specific geographic area there is a
much greater amount of mini-economies, all in different stages of the economic cycle; it is in
1. Place
theory possible for a single thetocursor
town below “The Role
be in recession/boom ofanother
whilst IGOs” is experiencing the
opposite. 2. Go to the References tab of the menu bar.
In a practical sense, it 3.
is Select
best forResearcher.
as many of these economic microcosms to be at the same stage
of the economic cycle4.asIn possible as it resultspane,
the Researcher in government
search onpolicy having its effectiveness
the terms
maximised, whether it be through the employment of fiscal or monetary policy.
“global economy.”
5. Click
To achieve great economic on the results
harmonisation card increasing
requires for “Economiccentral control to pursue an
economic area wide policyGlobalisation.” Note the topic overview
of inflation competence and stability and Though this is often
promotion.
viewed as a loss of provincial political
citable sourcessovereignty it is necessary
such as websites, books to and
remove disparities and thus
unfair advantages with certain firms
journals. across the economic area to provide the best conditions
possible for the promotion of competition and therefore economic efficiency.[ CITATION
Com17 \l 1033 ] 6. Click on the card “Intergovernmental
Organisations (IGOs).”
The Effects of Economic Globalisation
7. Click on Open in Readingon Developing Countries
View.
 Increased Standard of text
8. Select Living
in the first paragraph, then choose
Economic globalisation gives
Add and Cite governments of developing nations access to foreign
when prompted.
lending. When these funds are used on infrastructure including roads, health care,
education and 9. Notice
social the selected
services, textof
the standard is living
addedinto
thethe
country increases. If the money
document with a citation.
is used only selectively, however, not all citizens will participate in the benefits.
 Access to New Markets
Globalisation leads to freer trade between countries. This is one of its largest benefits to
developing nations. Homegrown industries see trade barriers fall and have access to a
much wider international market.
 Decreased Employment
Automation in the manufacturing and agricultural sectors lessens the need for unskilled
labour and unemployment rises in those sectors. If there is no infrastructure to help the
unemployed train for the globalised economy, social services in the country may become
strained trying to care for the new underclass.[ CITATION Moh17 \l 1033 ]
The Politics of Food: Using the AMIS Monitor
The AMIS Market Monitor provides a
synopsis of major developments in
international commodity markets, focusing
on wheat, maize, rice and soybeans. It
USE EDITOR
represents TO assessment
the collective BRING OUT of the
member organisations of AMIS concerning
YOUR
the BESTmarket
international WRITINGsituation and outlook.

1. Right-click the word “gret” (which has

Latest forecasts point to favourable production prospects a red
for squiggle
AMIS cropsbeneath it). Notice the
in the 2013/14
marketing season. Bigger harvests are expected to result in a significant increase
Spelling correction options in world
with cereal
stocks; corn in particular. First forecasts for soybeans also point towards a further
context (definitions) provided. expansion in
global production amid subdued consumption growth. More ample supplies could result in lower
and more stable prices in 2013/14 compared to 2012/13. 2. Right-click the word “affect” (which
has a blue, double-underline). Notice
the Grammar correction
Previous Month Forecast Previous with context
Season
Wheat Tightening(synonyms) provided.Easing
Corn Neutral Easing
Rice 3.
Neutral Right-click the phrase “taking into
Easing
Soybeans Neutral account” (which has aNeutral gold dotted
[ CITATION Com17 \l 1033 ][ CITATION Pri17 \l 1033 underline).
] Notice the Clarity and
Conciseness correction options with
Additional Arguments context provided.
Another standard argument for free trade is efficiency. “In theory if every country—gret and
small—devoted themselves to their comparative advantage, then their goods would be produced
more efficiently.” (Smith, pg. 70) However, in a free trade system, it is difficult for developing
countries to establish themselves within an industry or market. If developing countries are to
enter such industries, those industries have to be protected until they are strong enough to
compete with established nations. Tariffs have an affect as a common governmental protection,
and are a major reason the US and Japan have prospered in numerous markets. Advocates
criticise the “infant industry argument” by saying “…protected infants never grow up, and
demand to be permanently insulated from outside competition.” (Smith, pg. 71). We can only
hope that they are taking into account all the facts that are known to be true.

Looking to the Future

Clearly, we are living in a world moving towards a global economy. While free trade would
seemingly facilitate the benefits of having such an economy, there are too many significant
consequences that stand in the way of jumping wholeheartedly into such a system. As of now,
I do believe that Smith is right by proposing and arguing for restrictions that not only benefit
developing countries, but blue-collar workers. He concludes by stating, “I remain optimistic that,
as the world grows closer and closer together, that countries will turn their focus toward creating
a fairer, more pro-development trade structure.” Perhaps, in the future, if policies like such as
broad-based tariffs are implemented, countries will achieve a level playing field with the current
developed nations. From there, a free trade system may not be so far out of reach.
References
Complete economic integration. (n.d.). Retrieved 3 21, 2017, from Wikipedia: The Free
Encyclopedia: http://en.wikipedia.org/wiki/Complete_economic_integration
DeLong, J. B. (n.d.). Estimating World GDP, One Million B.C. – Present. Retrieved 3 21, 2017,
from http://holtz.org/Library/Social Science/Economics/Estimating World GDP by
DeLong/Estimating World GDP.htm
Image. (n.d.). Retrieved 3 21, 2017, from Wikipedia: The Free Encyclopedia:
http://upload.wikimedia.org/wikipedia/commons/thumb/2/2b/Countries_by_Real_GDP_G
rowth_Rate_%282014%29.svg/500px-Countries_by_Real_GDP_Growth_Rate_
%282014%29.svg.png
Mohr, A. (n.d.). The Effects of Economic Globalization on Developing Countries. Retrieved 3 21,
2017, from Demand Media: http://smallbusiness.chron.com/effects-economic-
globalization-developing-countries-3906.html
Price Volatility in Food and Agricultural Markets: Policy Responses. (n.d.). Retrieved 3 29, 2017,
from http://www.amis-
outlook.org/fileadmin/templates/AMIS/documents/Interagency_Report_to_the_G20_on_
Food_Price_Volatility.pdf
Report for selected country groups and subjects. (2016). Retrieved 3 21, 2017, from
International Monetary Fund:
http://www.imf.org/external/pubs/ft/weo/2016/02/weodata/weorept.aspx?
pr.x=48&pr.y=6&sy=2006&ey=2018&scsm=1&ssd=1&sort=country&ds=.&br=1&c=001%
2C110%2C163%2C200&s=NGDP_RPCH&grp=1&a=1

34%

66%