Free Trade Among Nations example essay topic

There is great debate over whether or not the World Trade Organization (WTO) is a worthy association with many proponents arguing for each side. The WTO may succeed in it's ultimate goal of creating free trade among nations and equalizing products, but at other, most costly measures to both the United States and worldwide. Even if the WTO does create free trade among member nations, it will be at these greater expenses, and will ultimately only end up being more costly for all in the end. The WTO follows a set of guidelines known as GATT. They were originally intended to be a set of rules and guidelines for the nations of the WTO to follow. GATT also established a way to break up trade disputes among member nations.

The power that the WTO was given to remove trade barriers on imports and exports has now been taken advantage of by international businesses, who instead of just applying it to the textiles and manufactured items that it was intended for, are also adding 'socially conscious' legislation (environmental laws, health care, animal rights, etc) to the list as well. When GATT was created, thought was not given to protecting animals or the environment, since those were not issues that many nations were concerned over. GATT was only intended to serve for trade in goods, but the Uruguay Round negotiations (which led to the creation of the WTO) extended that coverage to include less concrete items that a value cannot necessarily be placed on, such as services and intellect. Unions are opposed to the WTO because of job loss and lower wages.

They argue that free trade provides advantage to countries that have no minimum wage, child labor, or industrial safety laws. The unions express the concern that manufacturing corporations may shut down their businesses in the United States, and relocate to a more inexpensive area to produce their goods. In these less developed nations where little to no restrictions are placed on manufacturers, companies can produce and export their goods to the United States at a lower cost than if they were to stay in the US to generate the products. In these other nations companies can get away with employing young children in dangerous positions in plants, while only paying them pennies because there is no minimum wage in that country. This allows the companies to produce their goods at a lower cost since staying in the United States would subject them to minimum wage laws and significant environmental and safety regulations.

Producing goods in less developed nations also increases the likelihood that corporations will employ child labor. Additionally, they would be able to circumvent the environmental restrictions and work safety regulations that would be imposed in more developed nations. In countries such as these, the children need to work to live and have nowhere else to go because all the industries are the same. If free trade were not enforced, then developed nations would be able to put a trade barrier up against these manufacturers. However, these barriers are unable to be erected because the WTO has the power to levy sanctions against countries that attempt to create a trade barrier upon imports produced in such a manner.

Environmentalists express concern over the WTO for somewhat similar reasons. If a company is able to produce it's goods at a cheaper price in an underdeveloped nation, then why should it bother to operate within the United States where there are environmental regulations and restrictions to follow? Moreover, environmentalists are troubled by their lack of ability to protect endangered species. Because of this, free trade may hurt the global environment. They have expressed alarm at the speculation that international firms will locate more of their production facilities in underdeveloped nations without these environmental codes. Again, nations will not be able to enforce a trade barrier because of the WTO's ability to repeal them.

Such an example happened in the United States. The US had a ban on imported shrimp that were not caught with modified, environmentally safe nets. When some countries complained that their trade was decreased because of this, the WTO forced the United States to repeal the ban. Article XX of GATT is supposed to provide for protection of rights that were fought hard for by various groups representing the rights of animals, the environment, and healthcare. However, this protection has not come through. In every case brought to the WTO involving animal, environmental or health policy, the WTO has ruled against the policy and stated that it was an illegal trade barrier that must either change or be eliminated.

The WTO does not allow for extenuating circumstances. If the United States wanted to institute a ban on an import, then it must ban all imports of that kind, not just specific types. The WTO insists on an all or nothing approach in its attempt to level the playing field of products produced by nations. With the example given of the United States and the imported shrimp barrier, according to the WTO, the United States could have either placed a ban against all shrimp to enter the country, or chosen to allow all shrimp into the country. The barrier the US attempted to impose was not allowed by the WTO because it banned only the import of shrimp that were not caught in modified, environmentally safer nets. Again, Article XX failed in protecting these environmental rights, and instead ruled in favor of the commercial businesses.

In a strictly monetary sense, the United States might be both aided and also set back by the WTO. Consumers of certain goods in the US would be worse off, after the export of said products there would be fewer available for the purchase of the home consumer. This would be considered a decrease in the supply, and thus an increase in the demand would ensue, as the same number of consumers battle over a smaller number of products. This free trade would not only hurt the consumers of the nation sending the exports, but also the workers and manufacturers of the nation accepting the imports. These producers now have new competition that is making more of the good that they produce available. This increase in supply at a likely cheaper price will now have the industries selling fewer of their goods at a lower price in order to remain competitive.

With this free trade, no one is completely coming out on top within the nation. The consumers who are getting more goods at cheaper prices are also likely some of those whose companies are having to sell fewer of their goods at a lesser profit. In concept, the World Trade Organization is an admirable idea, and would work in the best interests of nations involved in it. However, it has instead given corporations power over sectors that they have little business being involved in. Economically for many nations, free trade might be a good thing and would help some of them financially, but only at the cost of other regions. If it is to truly function with its intended purpose of equalizing products from various nations, the WTO must undergo some changes.

Just as states within the United States are required to answer to a higher code of federal laws, so should nations involved in the WTO be required to meet certain minimum standards. Countries that have few, if any, standards right now are mostly underdeveloped nations. They will continue their laissez faire ways unless forced to change because they want to attract the free trade business of the world. For them there would be no immediate benefit in enacting a set of minimum standard laws.

Until the WTO realizes this and changes its ways, situations as previously mentioned will continue to occur, at the benefit of no one, and the expense of everyone..