Human Rights: Core International Treaty
Question: Are free trade and/or globalization good or bad? Are currency wars or trade wars going to be the conflicts of the future, or do the benefits of globalization prevent this from happening (an argument related to why the recession of 2007-2009 happened but also why it did not devolve into a depression like that of the 1930s)?
Response: Free trade and globalization are both good and bad. The side you fall on depends on where you are in life. The banana article showed that free trade can be bad for small farms that produce bananas because they have to compete on a level playing field for trade and that leaves them open to competing with larger corporate farms who have more resources This hurts the smaller company because they have less resources and cannot compete to the same degree.
On the other hand, free trade is good because it allows people in the US to purchase goods at much lower rates than if the US were to be completely against free trade,
Currency and trade wars could be a future trend with all of the developments happening in the world at large and here in the US. But globalization does put up a very good fight against such things. The world as a whole is more interconnected now than it was 10 years ago. As a result, if trade and currency wars were to happen, they would probably be motivated more by power politics than an economic threat. It would most likely be in the best interest of the US not to encourage or tempt these types of wars anyway simply because the country is still recovering from the recession.
The recession of 2007-2009 happened because the global economy played hard and fast with financial rules and regulations. This is a very simple explanation of a complex issue. However, the recession did not turn into a depression because currency was continually funneled into sectors that needed it which included bank bailouts and other measures. Had those measures not been taken, the US and global economies would have collapsed and sent us into a very bad financial state as a whole.
Class Responses:
Hi Helen,
Your post has raised some very interesting points. The fact that the US doe not have VAT is interesting but not surprising. Having to pay such high taxes on goods is something that does not seem practical for most American consumers. At the same time, perhaps having something similar to VAT would make companies think twice before moving to another for tax purposes. Trade is unbalanced and it adds to the significant financial disparities particularly between developed and developing nations.Like with most issues concerning other nations, it is very difficult to get anyone to agree to something never mind enforce it. But perhaps things will change down the line.
Hi Anuradha,
You have brought up a very good example about why free trade is important. When there are restrictions on goods like in your toilet paper example, …
