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To: Egon
Free trade only works between free economies.

Can you give a specific example of a "free economy," and list some of the characteristics that define it?

164 posted on 07/28/2005 10:18:07 AM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but Lord I'm free.)
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To: Alberta's Child
Can you give a specific example of a "free economy," and list some of the characteristics that define it?

Not sure about a list, but it boils down to this:

From an economic perspective, any government should be about removing the barriers to free trade. Taxes, fees, regulations, restrictions, etc., are all barriers to free trade imposed by government on its own industries. Whereever possible, these should be reduced or eliminated. This should result in a relatively "free economy".

In order to have a level playing field, it is assumed that the country you're trading with is following a similar model. If they're not, it can often lead to imbalances on the playing field that are detrimental to your industries. Where this is the case, it is your government's responsibility to protect its industries by imposing tariffs to keep everything fair.

If this isn't done, you end up with other countries "dumping" their products on us until our competing industry segment ceases to exist. Then the other country raises the price of that product and there's nothing you can do about it, as you have no competing product.

In a perfect world, this self-checking would happen universally. Unfortunately, it is not in the best interests of some world leaders to have "free trade". Therefore, they artificially control the levels of their currency (China) to give their industries an advantage. In others, the disparity in standard of living (India) is such that their workers can afford to live on much lower wages.

This means that you end up in the situation we're finding ourselves in: 90% of the products in your house are made in China and when you call technical support on your Dell computer (most of the parts therein made in Taiwan) you end up speaking to someone in Delhi.

We're not talking about isolated industry segments here (manufacturing, textiles), we're talking about industries across the board. That's not the product of "free economies".

181 posted on 07/28/2005 10:38:51 AM PDT by Egon (By the way, I took the liberty of fertilizing your caviar.)
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