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Free Trade Agreements Aren't Free

Free Trade Agreements Aren't Free

Free trade agreements are bad for workers. Those both domestic and abroad suffer from such policies. Cheaper labor drives business and jobs abroad, making domestic workers suffer. Abroad in cheap labor countries, firms compete with each other driving down labor costs and in the worst cases leading to slavery-like conditions.

These agreements foster poor working conditions as well as the degradation of natural resources. Often times we see that this kind of job outsourcing leads to the theft of intellectual property. Aside from the economic and environmental toll that foreign trade agreements place on countries with cheap labor, we come to see the destruction of the native culture. Too much capital and exploitation alongside a boost in technological progress that far outpaces the speed at which the culture progresses leads to that culture’s demise and eventual disappearance.

  A homeless woman sleeps on the streets of Mexico City in front of posters reflecting Americanization.

A homeless woman sleeps on the streets of Mexico City in front of posters reflecting Americanization.

Noam Chomsky, an analytical philosopher and one of the most quoted scholars in history, has written several books on the subject of free trade. In them, he dictates that free trade among countries leads to wage slavery. Wage slavery is the concept that as wages are driven down to the point where they are almost negligible workers are forced into a position of slavery. Unable to stop working for a single day, because wages are so low, workers cannot find new jobs. As more and more of the region has work outsourced to it, labor competition drives down wages throughout the entire region, ultimately spreading slavery. Entire nations of people working in sweatshops, working in poverty, working in chains. In the name of short-term profits, a nation's people are subdued and captured. Its culture destroyed.

  Anonymous photo of Honduras wage slaves.

Anonymous photo of Honduras wage slaves.

In an extensive study on the cultural and economic impact of NAFTA (a free trade agreement) on Mexico, many of these concerns were confirmed. “First, the continuous readjustment in the manufacturing sector, has affected employment. Thousands of national companies that were unable to compete in this new open economy went bankrupt. The rapid maquiladora (American companies positioning their manufacturing plants in Northern Mexico in order to benefit from cheap labor) growth has also worsened job conditions because they only employ unskilled labor, workers are paid very low wages and benefits are kept to a minimum. Second, the Mexican economy has increasingly become further exposed to external financial and economic shocks because of its linkage to the American economy. Third, the gap between the rich and the poor in Mexico has widened, and this has resulted in critical momentum for increased socio-political instability in the country. Fourth, the American pop culture invasion in Mexico has created a loss of the country’s national identity by taking over the Mexican cultural industry (television, radio, cinema and printed material).”

Furthermore, in another extensive study covering the environmental effects of NAFTA Gene M. Grossman and Alan B. Krueger stated, “A number of authors, including for example Pethig (1976), Siebert (1977). Yohe (1979) and McGuire (1982), have studied the theoretical relationship between environmental regulations and the pattern of trade. They find that strict environmental standards or costly controls weaken a country's competitive position in pollution-intensive industries and diminish its exports (or increase its imports) of the product of such sectors. Countries that fail to regulate industrial pollution increase their specialization in activities that damage the environment. McGuire has extended these results to include direct foreign investment: controls cause firms active in the pollution-intensive industry to relocate their activities to the less regulated countries.” This goes to say that the existence of a free trade agreement not only exploits resources and harms the environment but manipulates the government into promoting policies that further hurt the environment. Thus making harmful practices represent the majority of economic activity and destroying the region.

  Slums in an area of environmental exploitation.

Slums in an area of environmental exploitation.

With cultures disappearing and firms competing in low labor areas to drive down labor costs, we see (in some of the worst cases) slavery-like conditions where humans become no more than simple automatons. These foreign trade agreements are the embodiment of capitalistic greed. While destroying the very culture, people, and environment of wherever jobs are outsourced to, they grow the economic divide in the place where jobs are being outsourced from. By removing jobs from the working class and outsourcing them to another country, workers are now left jobless. While corporations that outsource jobs may be more profitable, that same benefit does not extend to the vast majority of the public. These economic benefits only help the top 1%. The loss for the working class and subsequent gain for the 1% further strengthen economic divide.

While some may argue that free trade agreements reduce government spending, they also reduce government revenue. Another argument often brought up is increased economic growth. While this may be true to some extent, the only growth happening ends up in the pockets of the already wealthy. Those whose jobs are being taken away suffer.

Free trade agreements are an engine for inequality. They destroy the culture, indignify the people, and exploit the environment in which they infiltrate. By supporting Fair Trade Initiatives and limiting how much we purchase we can fight against FTA’s.

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