i have an write essay for school tomorrow based on the free trade argument. the question is "evaluate the arguments for and against free trade". it has to be based on the australian economy, linking with america...can anyone help please!?
Anonymous
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I hope you got an extension.
The USA became a prosperous nation 100 years ago because we were the king of globalization.
What is happening today? Jobs leaving the USA, entire factories are shutting down and moving to foreign countries.
100 years ago, entire factories were moving to the USA. That's what caused that huge wave of immigration, because the factory owners often brought all their workers with them, paying their way in steerage on a steamer ship.
Why?
Tariffs. Tariffs on imports were the main source of revenues for the federal government. Income tax was unconstitutional until 1913, when Congress passed the Sixteenth Amendment. So tariffs were paying for most of the federal budget before then.
Tariffs raised the prices of imported goods, and it was harder for foreign factories to compete. So they moved their factories here, to avoid paying the tariff.
Tariffs were the successful way of managing globalization, and it turned the global economy in our favor. We became an indudstrial superpower exporter in 1880, and we became a creditor nation in 1914, because of 100 years of tariffs.
We ended tariffs in 1913 and replaced them with income tax, because exporters should not have tariffs. Once you reach that level of prosperity, you become vulnerable to retaliation from your customer nations. That's why the Smoot-Hawley tariff backfired in 1930. We were still an exporter, and other nations retaliated.
But that all ended when we lost our trade surplus in 1980, and we became a debtor nation again in 1988.
It was time to go back to tariffs during the 1980's. But the wealthy Wall Street Journal types were salivating over the idea of opening sweatshops in emerging Asian nations, so they raised the bogeyman of Smoot-Hawley to scare us away from tariffs.
The result has been an economy spiraling out of control. Our trade deficit is now equal to our total exports, which is more than ever in our entire history. We send out a trillion dollars a year on our trade deficit, which adds a trillion dollars of debt to our current account balance every year. The national personal savings rate was 4% in 1930, and it peaked at 10% in 1980. Today it is negative.
Our economy is now in crisis, unemployment is hovering around 10%, and our government is racking up staggering debts, from wars and stimulus giveaways that will never be paid back by the recipients. That means higher taxes in the future, which will only push us down deeper into the pit.
Free trade is making us a beggar nation.
Tariffs made us a prosperous nation.
It doesn't take a rocket scientist to figure out what we're doing wrong.
Source(s):
World Almanac 2009
Guo Lo C
I think you can get at least more than 4,000 lines in Australian free trade linking to the America in terms of media, drugs, and resources. By cruising the following Google Search published articles, you certainly can get enough words for your assignment to grant a pass or Honor.
http://search.yahoo.com/search?p=How%20Australian%20economy%20is%20affected%20by%20the%20free%20trade?
For the more profound about free trade, you should get the information about free trade between US and Canada. It also involved working visa and other kinds of free trade.
http://search.yahoo.com/search?p=Free%20trade%20between%20US%20and%20Canada
If you want to explore more about another kind of free trade (buying cheaper products from China and reexport to to Australia, US and and UK) by those smart Hong Kong traders, you can find out the so called reexport business up to 400% increased in one year period from the Hong Kong fact book.
http://search.yahoo.com/search?p=Hong%20Kong%20fact%20book
Anonymous
http://en.wikipedia.org/wiki/Free_trade
Rosalie Rayne
OMG! I have no clue.