The assignment is to write 300 words supporting this statement “Government has an important role to play in regulating & promoting free trade.”, and debating against “The Free Market should regulate Itself; there is no role for government.”
Also a respond in about 100 words debating against what is said below
I don’t support the idea of government getting involved in the free market system, as their influence doesn’t guarantee the efficiency of the market. Government’s involvement should only be concentrated on reducing of the trade barriers that would hurt the import or export of goods in international trading, protecting jobs and industries of the domestic market, and safeguarding the consumer from dangerous products. As Hill states, “….most economists saw little benefit in government intervention and strongly advocated a free trade policy.” (Hill, 2011, pg. 208) The free market should be given the privilege to regulate itself, since more often government involvement is based on their policies, and self-interest, which are influenced by their political affiliation with “interest groups.”
Hill states that the presence of government effecting “tariffs, quotas, antidumping actions, and subsidies aimed at protecting the “inefficient rather than help firms become efficient global competitors” can “trigger a trade war.” (Hill, 2011, pg. 225) By allowing government to implement these protectionist measures can also have a warped consequence on “production and trade,” and interferes “with the international division of labor and specialization” and would eventually result in “lowering overall wealth.” There is a limit when it comes to allowing government to have control over our industries and our lives, as the absence of government in the commercial area, and the removal of barriers have lead to an increase in employment opportunities, more revenue for the government, lower prices and better value, and more choices for the consumers.
And a respond in about 100 words debating against what is said below
It doesn’t seem that we have a Free Trade system. When the government intervenes they end up altering the price of the goods that are traded. It ends up defeating the benefits. Free trade is described by the text as a “situation in which a government does not attempt to restrict what its citizens can buy from or sell to another country". In my opinion the government has an important role to play, however there should be limitations to how they interfere.
My main opposition to government’s interference is the creation of tariffs. A tariff is a “tax levied on imports and exports” (Hill 2007). Although I see how it protects domestic products from foreign competition, I think it goes completely against the concept of free trade. It’s just yet another tax that the government benefits from and results in consumers paying higher prices. I agree with the author of the text who describes this type of action as self-defeating. To me Free trade is supposed to benefit the consumer first before the business or government.
Another role government plays on free trade that I don’t necessarily agree with is through sanctions. I would only agree if the sanction is on a country that imposes an actual threat to our security. However it’s generally imposed because of political ideals.
On the other hand regulations concerning health and safety should have government interference. For example, if a product is rejected because of the possibility of contamination. Also, if a product is against federal codes of safety, it is best rejected to protect the health and welfare of the population.