free trade millions of tons of goods in
motion across the planet it brings
prosperity or so we're told
protectionism and isolationism are evils
from the past or they were until Donald
Trump called for duties on steel imports
to the US Europe and China threatened
reprisals are we on the brink of a
full-scale trade war first I'm signing
an executive order to ensure that we
fully collect all duties imposed foreign
importers that cheap cheers how are we
being deceived when it comes to global
trade and what role do we ourselves play
in that deception lord sub-commission
Germany can't expect the rest of the
world to buy its goods while remaining
reluctant to buy goods from abroad
the arguments made for and against free
trade are full of contradictions Germans
are proud of the countries ranked at the
top of the list of exporting nations
seemingly unaware that free trade
destroys livelihoods at home and abroad
David and Goliath situation the choice
that in this case it's really a twist
because
I think the polls show who are the
real winners and is free trade really as
free as it sounds
[Music]
the port of Hamburg from here German
products are shipped to countries all
over the world in return around nine
million containers arrive here every
year most of them from China the city in
northern Germany is a gateway to Europe
for goods from Asia and when they enter
the EU many products are subject to
import duties cars from Asia and the US
are taxed at 10% clothing at 12%
smartphones are taxed at all customs
duties are complex there are thousands
of different types of terrorists in
countless variations agents Gabi Anson
and Ava Hoffmann from the ports central
customs office check imports every day
it's their job to ensure that goods are
declared properly there are a vast
number of loopholes
yes it says it's a microfiber coat for a
pet
that's right made of knitted polyester
exactly from the size I'd say it's
supposed to be for a dog made in China
and they're different sizes this one's
apparently for a medium-sized dog do the
dog coats have leather parts as well in
that case they'd be charged at a lower
rate 100% polyester so at the moment
that means that 12% import tax if these
were saddles that would only be 2.7%
they have no idea what's behind that
difference it's a decision taken at the
EU level all they do is check the
contents of containers I've been working
here for a long time and working here
you feel like Germany isn't the world's
top exporter but that most of the stuff
is coming from China the Chinese make
pretty much everything
the question is do import tariffs bring
benefits outside of government coffers
I guess they protect a country's
domestic economy is that true
what role does protecting domestic
industries play in an era of global free
trade we've come to the town of Huber
cowson in the German state of tearing in
home to volcán Renner's company Morita
and Centurion the former top cyclocross
cyclist was the man who brought mountain
biking to Germany in a big way today
he's a successful entrepreneur
[Music]
the company offers a range of models and
business is booming so where do the
bikes come from this bike it's made in
Germany no it's not made in Germany but
it's a German brand yeah it's a German
brand so where does the frame come from
like so many things the frame comes
from China it's painted and assembled in
Taiwan
Quality Control all happens here of
cobalt and here complete control yet a
bike designed in Germany assembled in
Taiwan from components manufactured in
China made in this way a bike like this
pays a 15 percent import duty when it
arrives in the EU but if it was shipped
directly to Germany from a factory in
China the importer would have to pay
almost 50% in punitive tariffs why
because a Chinese company can make bikes
much more cheaply than a German firm
ever could twenty years growth
become the world's largest bicycle
manufacturing leading enterprises in
this promotional video Chinese bicycle
manufacturer of foucha dirt flames it
has the largest bike Factory in the
world first-class production technology
and more than 100 robots welding machine
companies like these are subsidized by
the Chinese government but that's just
one reason Chinese products are so cheap
there's also scale creating miracles
with a production capacity of a hundred
million bicycles a year China could
quickly swamp the world with its
products companies like full gung
Renner's would go under so he sees the
import tariffs as protecting Europe's
bicycle manufacturing industry
protect Johnny smooth sometimes you have
to have protectionism it's unavoidable
the point is that in business you need a
fair playing field you can see it in
other areas too where government
subsidies keep other manufacturers from
competing because the market is
distorted so it's about jobs in Europe
sure it's about jobs and fairness the
import duty ensures that Chinese bikes
are more expensive when purchased in
Europe punitive tariffs a form of pure
protectionism but there are ways around
them for instance having the bike frames
that are produced in China finished in
Taiwan then punitive tariffs don't apply
the final assembly of bicycles made with
Chinese frames then takes place in
Europe it's an industry that provides
100,000 jobs on the continent
[Music]
Raynor is glad that protectionist
tariffs keep Chinese competitors out of
Europe's markets but the international
trade in bicycles is a hotly fought
segment and the companies trying to grab
a slice of the pie will go to great
lengths to do so not long after the EU
implemented punitive tariffs on bikes
from China they began to arrive from
Cambodia Malaysia Indonesia and other
places when it grew clear that the bikes
were actually being made by Chinese
firms punitive tariffs against those
countries were put in place then Tunisia
began exporting them and was soon slept
with tariffs today components for the
bikes are still mostly made in China but
the frames are finished elsewhere like
Taiwan because that's where the rules
say value was added the bikes are then
no longer subject to punitive tariffs
when they're imported into the EU
[Music]
so what happens when the market for
bicycles isn't protected by high import
duties in the US city of Philadelphia
bike store owner Brian Catholic used to
sell exclusively American brands that
had been produced domestically
but that changed a few years ago there
are still American brand names but the
bikes all originate in the same place
mainshine and doesn't matter which the
manufacturer is whether it's Trek
whether it's Cannondale whether it's
specialized all their bikes at some
price point or at some level are made
are made in China without protectionist
policies like those in Europe he says
Chinese bikes have flooded the market in
the US and that has in turn destroyed a
lot of jobs in the country especially in
his home state of Pennsylvania where the
bike manufacturing industry once
flourished
[Music]
the store owner says it's not a good
feeling to promote the sellout of the
domestic sector by selling cheap imports
but what choice does he have
keeps my family fed you know I own two
different bicycle shops to be able to
offer that offer my consumer a bike for
under $400 that has gears to be able to
offer a bike for under $300 that's like
a single speed ride around the city it's
nice to be able to do that
president Trump has threatened many
sectors with punitive tariffs but not
the bike industry in general Catholic is
critical of protectionist measures but
he would have made an exception for
bicycles it depends on what perspective
you're looking from you know people who
have lost their jobs because it's been
farmed out to China or Taiwan they'll
probably have a very different view than
somebody who's never been affected by
that but isn't free trade supposed to
bring more prosperity for everyone
American woes in many areas of trade
can't just be traced back to China but
also to Germany says professor herebut
dieter he teaches his university
students in free duce - that being an
export giant also has a dark side German
products sell well internationally not
just because they're high quality but
also because wages in the country have
only climbed moderately in recent years
while the Euro has remained relatively
weak
Trump is angry about the trade imbalance
and dieter says he has a point
deutsche uber sure surpluses in Germany
means deficits in other countries
Germany expects the rest of the world to
go into debt with Germany but also likes
to criticize the rest of the world for
being too deeply in debt it wants to
have its cake and eat it in these two
some Germany really does profit
immensely from global trade in 2017 it
exported goods worth over 1.2 trillion
euros like China that makes the EU a big
net exporter Germany has a whopping 250
billion euros trade surplus the US has a
deficit of around 500 billion with many
more goods and services flowing in than
flowing out ongoing debt has long-term
consequences for America
[Music]
one country's loss is another's gain we
head next form of area on the rivers
Iowa here manfred schmidt works for
Schaeffler a company making products
that are often exported to the US he
earns a good salary and can afford to
buy the things he wants that includes
many products made available by free
global trade
just like most households all over the
world
the Schmitz home is full of things made
in other countries is anything here in
their living room actually made in
Germany
mainly very little if we got rid of
everything that wasn't made in Germany
there'd be nothing left in Malaya with
one exception the antique sewing machine
proudly on display
what about clothing we take a look in
the family closet
[Music]
they made in Turkey made in Bangladesh
designed in Germany made in China even
[Music]
their pantry is full of food from all
over the world
the Schmidt's have had personal
experience with how quickly you can lose
in the free trade game manfred schmidt
nearly lost his job when Schaeffler
wanted to move his plant to a cheaper
location abroad the employees fight to
keep the plant drew national attention
Schmidt and his colleagues came to an
agreement with the company it worked for
a while for ten years we put in five
unpaid hours a week and then they came
overnight and said we're closing the
plant that was a shock for all of us who
worked there because we were all
thinking we do five hours a week for
free so that's a pretty sum the company
is getting for nothing the shadow side
of globalization Manfred Schmidt was
lucky he was able to stay with the
company but he had to move to another
plant everything's all sweetness and
light now and they act like we're the
winners because we make good money in
the industry but that's down to
relocations and plant closures we were
lucky to get positions enshrined for but
in another company they might just let
everyone go and those people will be the
loser schemer villian
manufacturers usually go where it's
cheapest we take a look at the Schmidt
family bicycles the brands are all
German but we know where they were all
made at least the frames
cheap production in China that cost
hundreds of thousands of jobs especially
in the u.s. back to Philadelphia the
city is a dynamic growing urban center
but in the surrounding region the
factories and jobs have disappeared like
in many parts of the US
Sarah Parker and her neighbor Susan
Schweickart don't count themselves as
losers in the globalization era and they
don't like Donald Trump but they're on a
mission by American Sarah has a popular
website and by American is its clarion
call in her USA love list
she gives thousands of fans advice on
how to replace products made in other
parts of the world she says it's about
their jobs you wouldn't believe how
often American flags are not even made
in the United States this is mainly
United States is it yeah oh yeah oh good
I like it when they when they put the
label Indian states on the front because
people really do care about that this
was made in a small town somewhere I'm
sure I don't know where but by looking
for them made in USA label I'm
supporting that small town and the
people who made it Parker says she
herself experienced how jobs moved south
of the border to Mexico and depopulated
whole areas as the factories died she
decided to do something about it
my first job after college was selling
Chevrolet I went back a few years ago
and that dealership just closed weeds
growing completely abandoned it's sad to
see and the pride that people have when
they build something and then are able
to purchase it I think that we've lost
that
it's often hard to determine the origin
of global products that's the new norm
the two Americans say that should bother
us more you know they don't have to tell
you where things are made I think it's
only food things and cars so we're
actually lucky they give us as much
information as they do
Parker admits that she made an exception
when she bought a Volvo the Swedish car
maker now belongs to a Chinese
multinational in her household she says
she's trying to buy only american-made
products with at times limited success
so there's some things that I'm not sure
but I know the KitchenAid is assembled
in Ohio I think I read that the bowl is
made in Korea I know that is not you
cannot buy an american-made toasters her
initiative sounds like it has a
nationalist agenda Parker says it all
boils down to a matter of choice I think
it's only nationalistic if you are
saying we're only going to buy
american-made products we make a lot of
choices as consumers we choose things
because they have recycled content in
them or we choose things because they
reflect a particular lifestyle that we
want choosing something that's made
either in your own community or your own
country is just another consumer choice
I'm glad that we have those choices
which is why for me at least it's not a
nationalistic effort so what would
happen if we all followed her advice and
tried to buy only products made
domestically
if borders closed and protectionism
reigned
it's happened before at the beginning of
the 20th century world trade and
globalization really took off but it
soon hit major speed bumps the u.s. slid
into the Great Depression Germany faced
a huge economic crisis of its own and
protectionism suddenly reared its head
voices calling for isolationist policies
grew loud during the 1930s the US began
to adopt an increasingly aggressive
protectionist stance raising tariffs
drastically to protect American
industries and jobs Germany also put up
barriers to international trade the
mixture of protectionism and nationalism
ended in the horrors of the Second World
War
[Music]
your hardness mid there were disastrous
developments in world trade in terms of
volume it fell by two-thirds within four
years by today's standards that's
unimaginable if we saw a five percent
fall in trade people would call it a
major crisis back then it fell
drastically and dramatically and that
development can be traced back to
protectionist policies put in place by
the United States of America defining
from start for American solutions to
prevent other major conflicts the body
that would eventually become the World
Trade Organization was set up
headquartered in Geneva its fundamental
principle that free trade brings
prosperity for all has never really been
accepted on the contrary the WTO has
come under heavy fire in recent years
and the u.s. led by Donald Trump largely
ignores it
[Music]
is protectionism set to send the world
into a new economic and political
tailspin or our dire predictions just
half the story in the town of Malacca in
the German state of Baden württemberg
the Styla group makes tiles business is
brisk the construction industry is
healthy but the business is facing stiff
competition from China
tiles from there are unbeatably cheap so
the EU has put punitive tariffs in place
tiles imported from China now have an
import duty of 26.3% protecting jobs
here from Asian competitors if they
didn't exist says Wilson baths and
kitchens in Germany would soon all be
tiled with Chinese products I think it's
justified in the current climate because
the competitive situation is unbalanced
we know that Chinese manufacturers are
selling their over capacities
internationally at very very low prices
and that puts us in a situation where we
can no longer be competitive we can't
keep our people we have to play by those
rules
[Applause]
punitive tariffs on tiles is also a
protectionist measure but it keeps
people in jobs in Germany and helps push
for better production and environmental
standards
[Applause]
we're pretty and we produce here in
Germany we're expected to comply with
laws that are relevant in Germany and we
do so we exercise control over things
like environmental aspects of course we
don't have that for products coming from
abroad then there's the issue of weight
versus value because it really makes
sense to transport these products over
such long distances without punitive
tariffs European tile makers wouldn't
hold out long under the pressure exerted
by their Chinese counterparts if the EU
hadn't instituted protectionist measures
the industry would soon disappear and
not just the tile industry in all the
block has put punitive tariffs in place
for fifty three types of imports from
China among them steel porcelain and
even ironing boards the anti-dumping
measures have been accepted by the WTO
protectionism is alive well and
apparently protecting jobs but although
the EU has taken measures to protect its
businesses it frowns on other countries
trying to do the same Cameroon
mommm Bali is on her way to her
plantation the path takes her through
the jungle she's the head of a village
cooperative located in the rainforests
north of yonder the walk takes about an
hour in each direction there's no street
the cooperative members harvested over
two tons of onions here last year and
sold the crop at a market in the distant
capital the proceeds fed the entire
village we use onions as a remedy for
example when you have digestive
complaints we use it as an antiseptic
and we make our sauces with onions
Cameroonians wouldn't know what to do
without onions now the women from the
village are planting cassava instead not
because they want to but because it no
longer makes sense to plant onions
onions imported from Europe have
destroyed the market to protect farmers
like these Cameroon would have to raise
import duties even more but it can't
because a new free trade agreement with
the EU called EPA prohibits that onion
fields stretched from here down to the
river and over there but then we stop
being able to sell all of them because
of the huge number of imports that's why
we had to stop growing them onions are a
staple here the African country consumes
hundreds of thousands of tons a year
until now they were all grown
domestically just as they do everyday
the women in the co-operative prepare
dinner for now they still have their own
onions produce that not only feeds them
and their families but also helps them
survive
[Music]
50 kilometers south at a market in
yaoundé is growing harder and harder to
find
onions grown domestically every morning
trucks arrive here filled with onions
most of them have been imported from
Holland they're the ones packaged in red
Nets my man Bali has dressed up for the
trip to Yan day to talk about the onion
issue she's meeting up with Yvonne
Hawking who heads up an office that
examines the effect free trade is having
on everyday consumers here
the two discovered that Dutch onions
cost around 1/3 less than homegrown
varieties but how can that be when
there's already a 30% punitive import
tariff on the vegetable and as though
the cheap onions weren't bad enough for
the farmers other agricultural products
like garlic from China are also flooding
markets in the fruitful country and
build our economies before thinking of
opening our markets to the world
European overproduction is undercutting
Africa's agriculture sector my man
ballet doesn't know what to do next what
happened with onions could happen just
as easily with other farm products and
the new free trade agreements with the
EU don't allow Cameroon to raise
punitive tariffs any further to protect
the industry time to understand that
they should leave African countries to
build your own markets just as the EU
took time to build its own markets it's
time to let us build our markets and
then we can see partnership agreements
with the EU
in other words Europeans are denying
Africans what they need most the right
to institute measures to protect their
still vulnerable agriculture sector all
industrialized countries including
Germany we're only able to grow into
economic heavyweights because they
initially threw up big barriers to
foreign competition but that fact is
conveniently forgotten nowadays without
protectionism in other words Germany
never would have turned into the
industrial powerhouse it later became
back in the 19th century the iron
Chancellor Otto von Bismarck closed
borders to keep out imports of wood and
grain from Russia and Britain also
protected itself by coming up with the
made in Germany label at the time it was
meant to identify cheap mass-produced
knives only later did the description
grow to have positive connotations
Linda pleading in dumb countries preach
free-trade principles when they
themselves are especially competitive
and they preach it for the sector's
where there is specially competitive but
in areas where they're less competitive
they allow protectionism like in
agriculture in Europe for example in
Switzerland
we've come to the canton of Sankt Gallen
not long ago the swiss decided in a
referendum to support more food security
and quality in their country
and this is one of the people behind the
movement the president of the Swiss
Farmers Union Marcus Ritter
he owns a typical family farm in the
area and he firmly believes that
unlimited free trade can be a dangerous
thing
bang-bang-bang huh bring the handle if
all trade were free if every border was
open then for economic reasons food
production here in Switzerland would
make no sense at all it would have to be
relocated to places where production is
cheapest some where labor costs next to
nothing but then it wouldn't be here in
Switzerland Swiss pay rates are on
average 50% higher than even in wealthy
neighbor Germany richer could never
produce food here in Switzerland as
cheaply as he could anywhere else in
Europe but it's about more than price
it's also about having a domestic
industry and saving jobs that's why the
country has imposed import duties on a
range of products the amount of those
duties makes a big difference here in
whether a business can today be run
profitably where the duties are very low
as is the case with milk for example it
makes things very tough where they're
higher as they are with things like
fruit and vege in those markets they
work very well
[Music]
here's how the Swiss do it strawberries
are a good example most of the year
they're charged three Swiss francs of
import duty per 100 kilograms but during
the harvest season in Switzerland that
climbs to five hundred and ten francs
which basically amounts to a ban on
strawberry imports with onions importers
usually pay just under three francs per
hundred kilos but while Swiss onions are
being harvested
it's 126 francs with veal importers pay
109 francs in duties within a fixed
limit if you want to import more though
you'll have to dig deep
2,900 francs on duties for just 100
kilograms of meat so what about bicycles
no matter where they're from they cost
just 12 francs apiece in tariffs the
farmers union president likes the
flexible import duty system it keeps
chief competitors out of the market when
it counts most
the Swiss farmers say it's not just
about protecting their livelihoods they
insist it's also about conservation and
animal welfare only with protectionism
they say can those and other values be
enforced cattle breeder Marcus Ritter
doesn't believe free-trade principles
are compatible with production standards
the Swiss would accept what's very
important is that here in Switzerland we
also believe we have an ethical
responsibility to produce the food here
that we can and not just seek to use our
purchasing power to get things on the
world market as cheaply as possible so
price plays a role but ethical
responsibility also plays an important
one
of course the Swiss pay a high price for
supporting domestic production of food
but it's the only way to make farmers in
the country competitive in a cheaper
world that's protectionism and Germans
do it too
Germany subsidizes every hectare of
farmland in the country to the tune of
280 euros annually in all countries in
Europe invest around 60 billion euros
every year in agriculture but that
encourages the overproduction of milk
and pork which are dumped cheap on the
Chinese market that's the other hidden
side of European protectionism and the
Americans do it as well
farmers there also receive huge
subsidies while giant agribusiness
multinationals export produce all over
the world the biggest losers in that
equation are small farmers in poor
countries which brings us back to
Cameroon for years European firms
exported poultry parts here that no one
in Europe wanted that destroyed agnus
KOA's breeding business no one bought
her Cameroonian chickens anymore at
least until the country decided to be
more protectionist and barred imports of
chicken parts since then business has
slowly picked up people in her village
are slowly beginning to raise birds for
sale again koa is a well-known figure in
the area she's happy to show us her
small farm
she hopes that things now will get a
little better these coops remained empty
for years because European chicken
especially parts from Germany simply
made it too cheap for her to compete but
now the ban on imports has given her a
fresh start it's going well again I love
my business I'm so happy
you can earn money again with chicken
farming a chicken market in yaoundé the
birds on offer here are domestic
varieties they had grown scarce while
cheap European imports dominated sales
Francisco Mari from the NGO bread for
the world has come on an inspection tour
15 years ago he was one of the first to
raise a public outcry about how europe's
poultry waste was destroying livelihoods
in africa he's glad to see the
Cameroon's ban on the import of frozen
poultry parts has restarted domestic
production closing the border helped in
this case but Cameroon has to lift the
ban because according to an agreement
signed with the EU tariffs and
non-tariff barriers have to go but mari
believes that if this critical juncture
in its development cameroon more than
ever needs to protect its industries
of course markets should be protected as
long as their products can't compete
with ours that's justified many
countries have only now begun to wrap up
their own production with these kinds of
systems
why shouldn't Africa be allowed to do
that Mary knows all about the price of
chicken and he's also acquainted with
the desperate situation people face here
and in other African countries the free
trade agreements that the EU is forcing
on them he says are one-sided and
outdated they give these countries no
advantages that they didn't already have
namely market access and they had to
open up their own markets step by step
to get it Cameroon has little chance to
protect itself
other industries and trades also need
protecting says Maori because they're
still in a critical phase companies in
Cameroon for instance could begin
building powerful motorcycles today they
all come from China free trade does
bring prosperity to some people but it
also widens the gap between rich and
poor the richest 10% of humanity now
owns 90% of the wealth on the planet the
poorest 50 percent of the world's
population has to make do with almost
nothing just 0.2 percent of the wealth
the winners are those who can afford to
invest in global concerns Google parent
company alphabet has quintupled in value
in the last few years
Apple's value has risen by a factor of
10 during the same period the world
economy has only grown by about a third
but capital flows across borders
wherever money can be made so the
finance sector also profits at a vast
scale from free trade
[Music]
the problem is there are no global rules
for taxation that allows big companies
to park billions in offshore tax havens
like the Cayman Islands or Panama
[Music]
there are no global controls in the
areas where they have the potential to
make a difference to the world's poorest
that's why protests are growing louder
like this one at a WTO meeting in Buenos
Aires
critics say the organization is little
more than a cartel there to protect the
interests of the powerful industrialized
nations and global concerns
people like mama and ballet have few
chances in a world like that
because without protectionism trade can
never be fair food production in
particular has to be shielded from cheap
competition whether in developing
countries or industrialized ones if we
want to continue producing food products
in the region rather than in the
cheapest place in the world and if the
products only follow the highest
purchasing power then the only way to
sustain that is with protectionism but a
positive protectionism based on
sustainability
Africa doesn't need fetters it needs
protection while its industries grow and
only when that happens will the flood of
migrants to Europe searching for a
better life finally slow Francisco Mari
says the current model is fundamentally
flawed the rules of world trade are
actually made to allow big countries to
invest in small ones and gain access to
their resources there's a lot of
hypocrisy there especially in
agriculture
everyone bangs on about how we need free
trade but is busy protecting themselves
in a huge way with subsidies to their
own farmers so it's a two-faced
deception crying out for free trade
internationally while practicing
protectionism at home that won't work
it's unfair and I believe there's no
future in it
[Music]
the global exchange of goods is always a
fight for prosperity and in the end
there are winners and losers trade that
is truly free is a myth and will always
remain one
[Music]
[Music]
you
English (auto-generated)