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The Forum > Article Comments > Free trade's not free, bring back the tariff > Comments

Free trade's not free, bring back the tariff : Comments

By Gilbert Holmes, published 1/12/2011

The theory of comparative advantage suffers some practical problems.

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Some of the points about the "unfairness" of free trade have nothing to do with free trade and everything to do with the corrupted political process. There are NO international free trade agreements at all in Australia, so how does one analyse or critique something that does not exist, even with NZ we have all sorts of protections in place ? Genuine free trade would take two people 10 minutes to sort out internationally, it's when the unfortunate reality of politics gets involved the process is corrupted. Perhaps look to the real villain in the process ?

That aside, The Greens want a bet each way if they're advocating protectionism. Of course, that's no different then any other political party. As one example, look to the Gunns Pulp Mill for an example of that. Proposed manufacturing at home in Aus, stringent developed world environmental standards, objected to, paper imported from "overseas" instead, with the diabolical impact of shipping pollution thrown into the equation ? Taking the entire process into account, I put it to Bob Brown that anyone objecting to the Mill is an environmental vandal, thus the logical conclusion is it's simple NIMBY-ism covered in the thinnest veneer of environmental protection.
Posted by Valley Guy, Saturday, 3 December 2011 8:35:06 AM
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We have a very strong belief in free trade. Is it mythical or scientific? Economics theories are historically conditioned as almost everything else. If Ricardo had lived in the second half of the 19th century, he would have added some modifications to his theory, because Germany was catching up.

"The most obvious feature of American economic discussion in the years after Ricardo and Malthus, for a near half century, in fact, was its absence in any formal sense. Or...the feeling that economics was a subject on which no one needed superior guidance...As the nineteenth century passed, as the frontier disappeared and as American farmers in particular came to sense their own adversity under the system, economic discussions would enlarge and extend in the United States(Kenneth Galbraith, A History of Economics)." American economics is most individualistic, belligerent and social-Darwinian. It is easy to see why it is so.

Myrdal, a Swedish economist, said more than twenty-five years ago that Sweden needed to take a sort of protectionism, in order to preserve its welfare, against the onrush of exports from Asian economically rising tigers.

If I may make a guess, our blind faith in free trade will not go on. I can think of at least two reasons. First, the universe is expanding but Stephen Hawking does not say that the earth is expanding, too. Second, Mr. Holmes say, "all parties can benefit, if each trading party focusses on producing what they are relatively best at, and they trade freely with one another for the rest of what they neee." But all parties are made up of not only Australians but also Americans, Chinese, Philippines, Indonesians and so on. If all parties can see eye to eye in economic matters, they cannot be expected to do so in political affairs. I doubt, at least for the moment, if the United States would entrust the Chinese with the production and manitenance of missiles and jet fighters because of economically, not politically, lower wages there. Unnan City, Japa
Posted by Michi, Wednesday, 7 December 2011 5:26:37 PM
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This has been so gratifying to read.

For those who are not familiar with the real impact of free trade on Australia, a quick read of the static site http://www.oziz4oziz.com/ will bring you up to speed, and also assist you to join the expanding campaign to restore tariffs.

Briefly, free trade has eliminated around 90% of domestic food production and a similar percentage of manufacturers; creating unemployment... not at the 5.2% of official claims, but 14% recorded in October 2010, and 13% homeless, who we can presume, are also unemployed.

How do politicians, journalists, social scientists, and academics come up with a figure of 5.2%? Easy: the definitions game. If you work, study or train for one hour per week you are deemed employed. If you are Aboriginal (ie CDEP), on work for the dole, or on a refugee or migrant sponsor list, or any other proscribed list of which there are hundreds, then you are employed. Also, if you are unemployed and on the job network lists you are employed. And so on.

Currently, there is an attempt to launch a campaign to conjoin manufacturers, domestic food producers, in a campaign to restore tariffs. Politically, this is not a difficult task, but manufacturers appear to want to die bravely rather than fight. Yet hundreds of thousands of Aussies are represented by a multitude of disparate organisations prepared to fight for tariffs.

Anyone who wants to know more about this can contact me on tonyryan43@gmail.com

And those who are skeptical about the above unemployment figures should Google back to the Bulletin survey of 1999; which first blew the whistle on corrupt science and politics.
Posted by Tony Ryan oziz4oz, Sunday, 18 December 2011 6:48:51 PM
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Deary me Tony, not that old broken record yet again.

If people had to pay 8000$ for an Australian made computer, few
could afford to be on the internet and so on. Fact is our standard
of living would drop dramatically.

There are plenty of jobs for those who bother to learn a skill and
those who bother not insisting living by the seaside or Byron,
where the surf is good.
Why does our fruit and vegie industry need to rely on backpackers
to pick their produce? Aussies don't want the jobs. Just ask
the meatworks how difficult it is to find labor. Many rely on 457
workers.

Trade has not only dramatically increased the price of our minerals,
its also opened up all sorts of new markets for our agricultural
products. China for instance, has gone from buying zilch lamb, to
becoming a significat market of thousands of tonnes. We export huge
volumes of milk powder, it keeps our dairy industry going. Farmers
would be the big losers through tariff barriers. Higher input costs
and export markets closing.

If you want to damage farmers, put up tariff barriers, as you
suggest. Talk about shooting yourself in the proverbial foot.

Sheesh...
Posted by Yabby, Sunday, 18 December 2011 7:33:25 PM
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Bob Katter's Australian Party actively advocates protectionist policies, and getting back to Australian values. One of The Australian Party's core values is also that "Australia needs to increase its population to achieve acceptable levels of economic, scientific, strategic and personal development. Government must develop immigration and birth rate policies consistent with these principles". They want a return to Australian values and businesses, but also support ongoing population growth and mass immigration? What about our environmental carrying capacity, and the risk of overpopulation? How does this protect Australia, and enshrine sovereign values? They are a contradiction!
Posted by VivKay, Monday, 19 December 2011 3:15:23 PM
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Who was it who said that 97.73% of statistics are made up on the spot?

>>... free trade has eliminated around 90% of domestic food production<<

Ok, you have my attention Tony Ryan oziz4oz.

Now back it up with some numbers, eh?

I have some for you to have a look at. And I haven't had to make a single one of them up.

"Australian farmers produce almost 93% of Australia's daily domestic food supply. Food imports contribute 7.5% of the total value of Australian retail food sales"

And...

"Australia exports a massive 60% (in volume) of total agricultural production. In terms of value, this represents around 76% of the total gross value of Australian agricultural production"

http://www.nff.org.au/farm-facts.html

Ok, I've shown you mine. Now you show me yours.
Posted by Pericles, Monday, 19 December 2011 4:11:38 PM
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