Free trade is one way to ensure efficient use of resources.
In government, free trade is predominantly advocated by political parties that hold liberal economic positions while economically left-wing and nationalist political parties generally support protectionism, the opposite of free trade.
So when you see Trump impose tariffs, know that he’s a protectionist. And nationalist. Not a fiscal conservative.
Since at least 2005 there’s been increasing distrust in ‘globalisation’. We ended up with idiots like Trump making decisions, his unsuccessful trade war with China, for example. Both sides lose in trade wars.
Expect everything to get more expensive and/or unavailable as free trade continues to decline.
Singapore is the #1 ranked nation as of 2016 in the Global Enabling Trade Report published by the World Economic Forum.
It is made up of four sub-indexes:
- Market access
- Border administration
- Transport and communications infrastructure
- Business environment
USA is #22. Canada #24.
There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare while free trade and the reduction of trade barriers has a positive effect on economic growth and economic stability.
One bit of good news – USMCA Free Trade Agreement will come into effect soon. That’s NAFTA 2.0 with minor tinkering of auto exports, steel and aluminum tariffs, dairy, egg, and poultry markets.
The agreement also provides updated intellectual property protections.
