Trade Arguments
The following slides contain a set of arguments for and against the development of free trade. I would like you to consider each argument and brainstorm any points of criticism that come to mind. (What holes can you see in the argument.) we will spend at least 5 min on each argument. After 5 min. give it a mark out of 10. 10 = I can’t think of any faults in the logic of this argument. 1 = this argument has no validity at all. Be prepared to justify your score.
Trade is good because… “It increase trade creation and therefore net welfare.” Critique of this point…. Validity of argument (mark out of 10):
Trade is good because… “It will increase our exports and therefore lead to increased economic growth.” Critique of this argument… Validity of argument (mark out of 10):
Trade is good because… “You can experience greater economies of scale and therefore drive down price and improve choice for the consumer.” Critique of this argument… Validity of argument (mark out of 10):
Trade is good because… “Trade leads to increased competition and therefore an improvement to standards, quality etc.” Critique of this argument… Validity of argument (mark out of 10):
Trade is good because… Better use of unwanted raw materials allow an overall better allocation of resources. (Qatar does not consume all the oil it owns, it would be a shame if it were to just stay in the ground.) Critique of this argument… Validity of argument (mark out of 10):
Trade is good because…
Free trade sucks because … It means infant industries that would benefit the domestic economy if allowed to flourish get swamped by international competition from larger foreign owned firms. Critique… Validity of argument (mark out of 10):
Free trade sucks because … Sunset industries (British steel) crash quickly as a new country emerges with a better price product (Indian Steel). This causes the total collapse of communities. These sunset industries need subsidises and communities govt support until alternative are found. Critique… Validity of argument (mark out of 10):
Free trade sucks because … “Economies become too dependent on the few industries. This leads you exposed to prices changes, recessions etc. You need protectionism to diversify your economy.” Critique… Validity of argument (mark out of 10):
Free trade sucks because … “It reduces government tax revenue. Less tariff, less corporation tax, less income tax etc…” Critique…. Validity of argument (mark out of 10):
Free trade sucks because … “It allows other nations and firms to dump their products on your market damaging the local economy and putting domestic firms at risk.” Critique… Validity of argument (mark out of 10):
Free trade sucks because … “It damages the environment. Not just because of transport but also because production will tend to go to countries with the most lax environmental protection laws.” Critique Validity of argument (mark out of 10):
Free trade sucks because … “It hurts the workers. Workers in the developed world lose their jobs and firms will then exploit the workers in the poorer world paying them lower wages with lower health and safety standard conditions.” Critique. Validity of argument (mark out of 10):
Free trade sucks because … “Because it leads to cultural homogeneity, where everyone wears the same clothes, eats the same food and so forth.” Critique. Validity of argument (mark out of 10):
Essay Questions The impacts of international trade have been largely beneficial to the global economy. To what extent do you agree with this statement?