Free International Trade Essay Sample
The provision of unilateral tariff liberalization by the European Union on exports from the ACP countries precipitated debate. The question was whether ACP countries stood to benefit from liberal tariffs of through free trade agreement. The only source of enlightenment logically narrows down to weighing the pros and cons. Thus, by juxtaposing the two, substantial evidence could suffice condemning one to the drain and elevating the standards of the other and its practical viability.
Tariff liberalization offers an African country preferential access to market. The aim is to ensure protection from competition from products deemed to 100% originate from Africa. The unilateral tariffs offered African countries chance for economic growth through concerted focus on the exports. The liberalization would offer reprieve for ACP countries by taxing imports from EU member states. This boosted by great margins the quality of exports from Africa, exploring and underlining the belief that the untapped potential from the region is enormous.
However, unilateral tariff liberalization had its economic disadvantages. Majorly, the restriction of such a deal to products deemed to be purely African emitted tones of exploitation. With African countries recording low manufacturing companies and output, the reliance on manufacturers from the EU region is understandable. The waiver on tariff meant that the European countries could achieve raw materials with minimal of effort or in low prices. This amounts to exploitation.
The relationship between EU and ACP countries was based on aid, market access and institutional balance. Through free trade, efficient macro-economic order for ACP countries was assured. The volume of trade would facilitate growth reducing the high risk of subjection to restrictions. In addition, the move would see improved exporting ventures and diversity in exports. This would ostensibly enable the EU offer technical assistance to improve the reputation of products with African origin. The eventual result would indeed fuel proper avenues for exploitation of the African countries in that the amount they can produce is far less than the import and even then local products will not measure up to the low pricing of imports, informed by the cost of production.
In effect, each of the proposed sides has its pros and cons. Indeed, it should be deemed essential that all the maxims are evaluated and trade measured by the volumes and capabilities of individual nations be considered to enable all stakeholders benefit from the nobility of this course. This will in the meanwhile attend to issues of aid, technical assistance and policy dialogue, the causes that informed the logic behind the promise of free trade.
The positions of Collier et al vs McQueen juxtaposed
Collier and his colleagues examined how useful to Africa a free trade agreement with EU would be. They echoed the essence of aid, market access and institutional innovation as the key factors that informed either liberalization or free trade. Ultimately, the proceeds from the trade ought to reach all stakeholders, and in my opinion to their benefit it should manifest itself in gains at the end of the whole process. By offering technical assistance, policy dialogue and modification it is indeed a process of creating a lee way to the European nations, former colonial masters, to free or cost-reduced access to raw materials.
McQueen argues that the Lome treaty, liberalizing trade for exports from ACP countries, failed to provide aid, technical assistance and policy dialogue between key parties for the benefit of ACP residents. With many nations ravaged by civil strife, McQueen validly noted the importance of proper policy formulation for any trade agreements were not to help the rich fellows make themselves richer but rather aimed at alleviating poverty as well as improving the livelihoods of millions living below the poverty line. By stressing the failure, valid notes sufficed indicating the importance of stressing on establishment of efficient tools for governing and administering to the nation.
In their part, Collier and co. busied themselves with establishing the flawed mechanisms that are African Economies. They classified them as; Economies without peace, Economies without a minimum adequate macroeconomic Environment, Economies without a minimum Adequate resource allocation environment and Countries with a minimum adequate environment. The persistence of poverty in Africa despite reformed economic policies was established as a major problem. However, other countries have totally lacked in good policies and what they have in place can only be described as at 'no stretch of imagination as market friendly' (Collier, 290). Thus they advocated for the provision of a minimum adequate environment.
Collier noted that 'it is unfortunate that the effect of aid on social cohesion is ambiguous' (Collier, 293). Elaborating on the dangers of aiding either party especially in times of strife, they likened it to fueling already pumped up ships. Thus, it is clear that they were negative on the importance and crucial part aid would play if it turned out that either party was benefitting from it. They also argued against promoting macroeconomic stability arguing that instability is as a cause of natural conditions and the functioning of world economy. They argued that linking trade to foreign aid was never going so settle the din emanating from the pangs of misrule and abject poverty.