The balance of geopolitical powers and the public`s rejection of uncontrolled politicisation have replaced this dream with an explosion of bilateral and multilateral trade agreements around the world (see Figure 1 for an overview of preferential agreements available to the EU). How does a company, with this multitude of agreements, implement the necessary changes to take advantage of these free trade agreements? Preparation, process changes, risk assessment and supplier/product qualifications? And they must do so at the same time as the ever-changing procurement, manufacturing and sales strategies dictated by a truly global environment, with both developed and emerging countries key to business success. It`s like jumping while it`s moving at 100 km/h. The answer is obvious: with dedicated resources, software processes and automation, the integration of preferential origin across the value chain, gaining strategic competitive advantages – and margin base points – every step of the way. The liberation of trade “does not open up new markets” but allows huge multinationals to become even bigger and more multinational – to the detriment of small businesses and the rest of us. The Giveaway, of course, is that free traders claim that a) trade wars are a terrible threat that we must constantly worry about, and b) it is obvious that no nation can ever win to have one. Think about it for minutes. Free trade advocates argue that restoring tariffs to protect wages and democracy would trigger trade wars and even cause recessions and depressions. One of the assertions they make is that tariffs contributed to the Great Depression of the 1930s. Economist Paul Krugman echoed this argument in 2009 in “Protectionism and the Great Depression” and wrote that aid and development priorities, associated with trade agreements, can also influence hunger, as shown by the following quote: free trade has become a scam that had to circumvent the costs of democracy – good wages, environmental protection and other common goods – but also use cheap foreign labour and weak regulation as a gap to reduce those costs here too and, ultimately, to weaken democracy.

Free Trade Agreement Problems

  • December 9th, 2020
  • Posted in Uncategorized

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