Trade Justice or Free Trade?

By Penny Hawthorne | 26 October 2005

On Wednesday 2nd November campaigners will be outside Britain's Houses of Parliament calling for "trade justice not free trade". But a GI report argues that free trade, not "trade justice", is the solution to world poverty. Trade Justice or Free trade? points out that countries that have followed 'trade justice' have stayed poor, while those - like Hong Kong - which have adopted free trade have become rich.

The report demolishes the argument that poor countries need to protect infant industries, and shows that while such protection might sound good in principle, such policies never work in practice. It points out the failure of such policies in India, and how infant industry protection was merely a way for the rich to profit at the expense of ordinary Indians.

The Trade Justice Movement's support for managed trade, with price supports and quotas, is shown to cause poverty by reducing the world economy's ability to create wealth. The Movement's ideas for controlling world trade are impractical and would lead to the Sovietization of the world economy.

The report concludes by arguing that "trade justice" is not just. The only truly just system of trade is based not on fixed prices and quotas, but on free trade.