Australia IS the only country that believes in 'free trade', just look at Craig Emmerson rushing around trying to export all our jobs (that remain after Hawke-Keating-Howard exported most).

But this 'free trade' is a funny thing too.

Kim Carr is a 'free trader' who is busying pouring taxpayer funds into overseas firms to help keep them 'viable'.

Odd!

Why not let them fall, in line with the free market rejection of their unwanted and poorly designed products?

I'd much rather drive a Honda Jazz, made in Thailand, than some junk box Holden or Ford.

Why should we support these dinsosaur cars and their makers?

Chris - as an academic you should be well aware of the long debate in Australia over the dismantling of our system of protection and, yes, it has been shown many times that we would still benefit if everyone else was protectionist and we were free.. Look it up!

Australia is hardly fully free of course and, sure, there is some chance of the world reverting to more protection for various reasons, but is that worth Australia becoming more protectionist? No. What you should do is compare and contrast the examples of NZ and Australia, where NZ has not done nearly as much towards unraveling protection and agrisocialism in its economy, then ask youself what the effects of protection would be in small economy.

Curmudgeon,

Not sure what you are saying. Please provide me with a detailed study to show why Aust going alone (from today) will always benefit from free trade with adequate regard to what happens on rest of developed world and also the many Aust industries. Also, please offer studies in line with current trends, including all the ramifications of the decline of the US and other democracies. I would love to read some astute stuff.

Also, debates 30 years ago do not explain much about today's situation.

You, and others, appear to make it sound so simple. Well, i am not so sure.

There are many reasons why Aust prospered last 30 years, and freer trade only partially explains this. Will detail this in future article.

Also, tell me how the US and Western Europe will also prosper from free trade now without Aust's luxury of having abundant minerals in the ground.

This is not the first time Chris has attacked free trade, and it is striking than on each of those occasions he has never directly addressed the arguments in favour of free trade. He resorts to insults (free traders are “zealots”), appeals to the examples of other countries (France and the USA are protectionist, so it must be right!). unsubstantiated generalisations (“Australia would struggle to have a high-tech manufacturing industry without substantial industry assistance”), and appeals to consequences that are implausible and illogical (“Western nations will be much less likely to accept their own demise” - who says they should?)

American paranoia at other countries’ economic success is not new. We saw an almost identical surge of populist xenophobia against Japan when its economy was booming the 1990s. Then, as now, more sensible and informed opinion in the USA opposed protectionism (http://www.ft.com/cms/s/2/003a090e-7687-11dc-ad83-0000779fd2ac.html#axzz1jaxvmyXG). Then, as now, the USA’s trade deficit owed nothing to “unfair” practices by its trading partners but was driven by its persistent habit of consuming more than it produces.

"every time an American patriot buys a Made-in-China product at Walmart, he or she is investing in China's military expansion, which forces us to invest more in our military to counter the threat".

Bingo. Chinese goods are therefore not cheap, and we should find someone else to make our cheap goods, or make them oursleves.

No, free trade must be truly reciprocal to be free trade; and, nobody has ever explained; how we benefit from debt laden speculators, with foreign head offices, buying up our iconic brands, with debt instruments, we invariably repay; or, how we prosper by allowing foreign interests to buy our most productive farmland.
There is a precedent for limiting the latter; to third generation citizens?
However, we do need to think beyond the current mining boom and how best to position our economy for the future? As an Island nation, is it just practical common sense;'s that we once again become a maritime nation, with a fleet of nuclear powered freight forwarders/container cargo ships, rather than remain dependant on other nation's diesel powered ships, for all our exports finding their way to market?
We own 40% of the world's known uranium reserves; and, ought to be clever enough; to utilise this, in a reasonably safe way to power our own shipping; and, as the future oil shocks whack our competitors, all but corner a very lucrative captive market.
Our future also depends on attracting high tech energy dependant industries to these shores!
To that end, our own alternative energy supplies need to be seriously cheaper than those they replace; and, our tax system needs to be seriously overhauled; to remove all compliance costs; and, the entirely unproductive parasites, who benefit from it/them?

Rhian, where did i say it must be right if France and the US become protectionist. I point these trends out as facts as an observation made of recent trends.

Also, the US paranoid? It was the US that did most to promote freer trade and the rise of Japan and China, much more than any other Western nation, at least in real terms.

All i am saying is that what was right for last 30 years, may not be right for next 30 years, unless of course you accept the most recent trends. I don't.

You would think that somebody who went to the trouble to write an article about free trade, would go to the trouble of understanding the reasons in favour of it. But there is no sign of that in this article. On the one hand he claims to favour free trade as a guiding light, but on the other, he shows himself wedded to the central fallacy of protectionism, exploded nearly 200 years ago, that free trade actually makes the parties to it poorer. Durr...

While ever Chris Lewis fails to be able to define what he himself calls the right policy mix it is no wonder it will remain elusive. He himself needs to define the *principle* (as opposed to the *political expedient*) by which beneficial free trade is distinguised from non-beneficial. Alleging that it is defined by legislative fiat merely shows base ignorance of what he is talking about.

Amazing that such a garble-brain could have a paid position as an intellectual, but when we consider the strange coincidence of his circular views on the beneficence of armed attacks against free trade, and the fact that his above-market-rate pay and conditions are state-funded, perhaps it is no mystery after all.

Peter Hume, for what it is worth, you really should your comments about my supposed intellectual role, and being paid for such comments alone. You are wrong on both counts.

First, i write because i like to write and am interested in many issues. I was writing for Quadrant when i was a labourer, virtually for nothing.

Second, OLO pieces are worth nothing in universities. I have been told by professors they count for nothing.

Third, I write all OLO pieces in my spare time. I have never been paid for any of my work. I am paid for other work.

As for your smart ... comment about my ability, or lack of it, I don't have any problem with that. You could be right. I am just another simpleton expressing my opinion, for all of its strengths and weaknesses.

I have never read the perfect opinion, and suspect I never will.

Chris

Of course what was right in the past may not be right in future, but you have not gone to any effort to explain WHY that may be so. Does comparative advantage no longer apply? Are there infant industries to protect? Strategic trade issues relating to imperfect markets? Economics not only gave us the theory that supports free trade, it also gives us some cases where the general rule that free trade is beneficial may not apply. But I can’t see you engaging with the economic arguments for, or even against, free trade. You don’t address the issues. The fact that support for protectionism waxes and wanes tells us nothing about whether it is a good idea

Rhian, fair enough. I probably should have done so.

However, I do intend to explain why the situation supporting freer trade is much more complicated today than in past three decades. I will also seek to explain why Aust's eco fortunes in last three decades also owes much to policies in previous decades.

There is only so much you can do in one opinion piece, but i will take your criticism on board and lift my game.

P.S: I am not against freer trade, contrary to what some readers believe. However, I do think there are always policy shortcomings from an open pursuit of any concept in such a competitive world

When libertarians of a former age denied that burning witches has any social benefit whatsoever, the Chris Lewis’s of the world, starting from “the simple truth” that governments will interfere, simply persisted in looking for the “right policy mix” of burning and not-burning them.

Chris is still trying to figure out the conditions on which consensual transactions should be graciously permitted by nothing but arbitrary power for which he is unable to provide any reason but mere power itself.

Chris, the flaw in your idea that the "balance" must lie somewhere between two extremes should be obvious. Only if the two extremes are values worth promoting is there any question of a balance between them. There is no balance that policy should try to strike as between making love and rape, or between murder and not-murder, is there? Those who advocate that anti-social aggression should be banned are not "zealots".

Your task is to identify the rational principle, as opposed to the arbitrary political expedient, that distinguishes the free trade you agree is socially beneficial, from the free trade you allege makes society worse off. And remember that human society doesn't stop at the border.

I find it amazing that someone can publish an article on free trade, allege that it's generally good, and at the same time allege that it can't be permitted without conditions, without identifying those conditions. Your are only displaying your confusion.

Ian Fletcher (author of Free Trade Doesn't Work) illustrates the mindless snobbish groupthink of unbalanced/free trade:
http://www.youtube.com/watch?v=chc-F1BOQwI

mralstoner

So do you think all free trade should be abolished, i.e. no-one should be free to exchange anything with anyone, with all decisions on what to exchange being made by some central coercive authority?

If not, then obviously you are partly in favour of free trade. Why don't you explain the conditions on which trade should be free? Why don't those same conditions apply to the trade that should not?

Peter Hume, why do you presume I have all the answers? Currently, lower prices is the only thing that free-trade values. But clearly such mindless freedom is now trashing other values. Free trade is currently set at the "suicidally paralysed" level. We are literally financing the expansion of China's military. That is insane. Complete lunacy. National security is a value that must not be usurped by the mindless pursuit of cheaper prices.

And there's other values that need to re-enter the picture. Do we all want to work down a mine? No. We value certain type of work, in a certain place i.e. not too far from our families and not down a stinky mine. And we need to retain manufacturing skills in the country.

I don't have all the answers, but we need to pull these other values back into the picture. So I'd say we do need some form of protectionism. Off the top of my head, I say that whatever someone wants to produce locally that is not ridiculously overpriced, ought to be protected by a tariff. If it costs us a bit more to do that, so be it. And whatever we can't produce here, import it.