James Higham wrote about this at Orphans, there's no point me summarising you might as well pop over and read the whole thing but here's the flavour:
And therein lies the dilemma of free trade. As a staunch advocate of small and medium business ‘free’ enterprise, at what point does this become advocate of south-east Asian sweatshops?
Within our own country, we rail against – and quite rightly too – government interference designed to skim off any profit before the business can even get on it s feet, so that’s the opposite extreme.
I commented:
Most people assume that "free trade" means international and cross-border, but internal free trade rules are just as important.
So if the USA enters into a so-called "free trade" agreement by which US companies are granted monopoly rights and protections in the other country, that is simply not "free trade". Had the other country granted those rights to its domestic producers that would not be free trade, why is it any different if it grants those rights to foreigners?
As luck would have it, to illustrate the point, there was an article in yesterday's FT:
You may think, like the Heritage Foundation, that Hong Kong is a free market. However, except for external trade, it is not.
Instead it is what one of the richest men in the city once described to me as “a nice bowl of fish soup”. That soup is fed to the few, making ordinary people poorer, stoking resentment, and indirectly contributing to acute pollution.
Apparently everything - from housing to public transport to supermarkets - is run by a few large cartels.
------------------------------------------
Or, turning to the worst tax of all, VAT, that is not particularly a barrier to imports and exports - but it is a barrier to free trade within a country.
Imagine that Scotland had voted for independence and rUK imposed an import duty of 20% on everything we bought from Scotland and vice versa, would we view that as anti-free trade?
Yes of course, but that's no different to VAT, which has exactly the same effect on economic activity. It's like treating each business as a foreign country and imposing a 20% import duty when a UK based consumer spends his own money on goods and services from it.
Debate Magazine
