“Future of free trade in light of Globalization Vs Protectionist measures”

globalization:

the process by which businesses or other organizations develop international influence or start operating on an international
scale.

protectionism:

the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports.

free trade:

international trade left to its natural course without tariffs(a tax or duty to be paid on a particular class of imports or
exports.), quotas, or other restrictions.

What are protectionist measures?

Protectionism, policy of protecting domestic industries against foreign competition by means of tariffs, subsidies,
import quotas, or other restrictions or handicaps placed on the imports of foreign competitors. ... Government-levied
tariffs are the chief protectionist measures.

dumping:

Dumping is when a country's businesses lower the sales price of their exports to gain unfair market share. They drop
the product's price below what it would sell for at home. They may even push the price below the actual cost to
produce.

The proponents (a person who advocates a theory, proposal, or course of action.) say globalization represents free
trade which promotes global economic growth; creates jobs, makes companies more competitive, and lowers prices
for consumers. In the case for protectionism, if a country is trying to grow strong in a new industry, tariffs will protect
it from foreign competitors

The benefits from International trade far outweigh any feasible economic forecast that can be achieved through
Protectionism. Although there are pros and cons to both, there is no denying that globalization has had the largest
influence on global technological innovation, and without global trade, we would fail to make the necessary

advancements needed to sustain our species.

In the long term, trade protectionism weakens the industry. Without competition, companies within the industry have
no need to innovate. Eventually, the domestic product will decline in quality and be more expensive than what foreign
competitors produce.

Supporters of globalization argue that it has the potential to make this world a better place to live in and solve some
of the deep-seated problems like unemployment and poverty.

It is dangerous for the world’s trading system when countries impose protectionist measures, and even self-defeating
given that production chains are global, Singapore’s trade and industry .there are no winners in a situation where
countries impose protectionist measures.

globalization represents free trade which promotes global economic growth; creates jobs, makes companies more
competitive, and lowers prices for consumers.

Furthermore, the sharing of technology with developing nations will help them progress. True for small countries but
stealing our technologies and IP have become a big problem with our larger competitors like China.

Developed country or developing country – both can implement protectionist policies to some degree of success – but
without engaging in global trade to capitalize on their comparative advantage in the world market, capacities for
growth are severely limited.

Countries that attempt to go it alone will also find it is “self-defeating,” with increasing inter-dependency between
economies and production chains

Disadvantages

In the long term, trade protectionism weakens the industry. Without competition, companies within the industry have
no need to innovate. Eventually, the domestic product will decline in quality and be more expensive than what foreign
competitors produce.

Job outsourcing is a result of declining U.S. competitiveness. Competition has declined from decades of the United
States not investing in education. This is particularly true for high-tech, engineering, and science. Increased trade
opens new markets for businesses to sell their products. The Peterson Institute for International Economics estimates
that ending all trade barriers would increase U.S. income by $500 billion.

Increasing U.S. protectionism will further slow economic growth. It would cause more layoffs, not fewer. If the United
States closes its borders, other countries will do the same. This could cause layoffs among the 12 million U.S. workers
who owe their jobs to exports.

GSL #1 :

The benefits from International trade far outweigh any feasible economic forecast that can be achieved through
Protectionism. Although there are pros and cons to both, there is no denying that globalization has had the largest
influence on global technological innovation, and without global trade, we would fail to make the necessary
advancements needed to sustain our species.

Supporters of globalization argue that it has the potential to make this world a better place to live in and solve some
of the deep-seated problems like unemployment and poverty.

Free trade is supposed to reduce barriers such as tariffs, value added taxes, subsidies, and other barriers between
nations. This is not true. There are still many barriers to free trade.In the long term, trade protectionism weakens the
industry. Without competition, companies within the industry have no need to innovate. Eventually, the domestic
product will decline in quality and be more expensive than what foreign competitors produce.

The proponents say globalization represents free trade which promotes global economic growth; creates jobs, makes
companies more competitive, and lowers prices for consumers.

Furthermore, the sharing of technology with developing nations will help them progress. True for small countries but
stealing our technologies and IP have become a big problem with our larger competitors like China.

In the case for protectionism, if a country is trying to grow strong in a new industry, tariffs will protect it from foreign
competitors. That gives the new industry’s companies time to develop their own competitive advantages. However,
domestic industries and markets can only grow so much until they must embark on global trade, otherwise, they
won’t be able to meet growing supply and demand.

Protectionism does temporarily create jobs for domestic workers. The protection of tariffs, quotas or subsidies allows
domestic companies to hire locally, but again, if a company in a protectionist state wants to expand, they won’t be
able to.

In the long term, trade protectionism weakens the industry. Without competition, companies within the industry have
no need to innovate. Eventually, the domestic product will decline in quality. It will be lower quality and more
expensive than what foreign competitors produce.

Job outsourcing is a result of declining U.S. Competitiveness. Competition has declined from decades of the United
States not investing in education. This is particularly true for high-tech, engineering, and science.

Increased trade opens new markets for businesses to sell their products. The Peterson Institute for International
Economics estimates that ending all trade barriers would increase U.S. income by $500 billion.

protectionism

Increasing U.S. protectionism will further slow economic growth. It would cause more layoffs, not fewer. If the United
States closes its borders, other countries will do the same. This could cause layoffs among the 12 million U.S. workers
who owe their jobs to exports.

Although certain policies in the US are pointing to more of a protectionist future, there will always remain an element
of global trade within their economic arsenal because of the concept of comparative advantages. The US has
withdrawn from the TPP, is looking to withdraw from NAFTA, while aims to increase import tariffs and focus more on
service and manufacturing industries for their long-term economic development plan.

This can most definitely work in favor for the US, but it’s not hard to see that the more the United States withdraws
from the Global economy, the more room emerging economies have to work with. This will indeed, be very beneficial
for those living in developing nations, as outsourcing of US products will shift away from China and closer to other
Asian or possibly even Latin America and African countries in the future because they pose no significant threat to US
economic stability.

Developed country or developing country – both can implement protectionist policies to some degree of success – but
without engaging in global trade to capitalize on their comparative advantage in the world market, capacities for
growth are severely limited.

SINGAPORE'S FREE TRADE AGREEMENTS :

Singapore's Free Trade Agreements

A Free Trade Agreement (FTA) is a legally binding agreement between two or more countries to reduce or eliminate
barriers to trade, and facilitate cross border movement of goods and services between the territories of the Parties.

Since the signing of her first FTA under the ASEAN Free Trade Area (AFTA) in 1993, Singapore’s network of FTAs has
expanded to cover 18 regional and bilateral FTAs with 24 trading partners. Singapore’s FTAs have been instrumental in
helping Singapore-based businesses strengthen cross-border trade by eliminating or reducing import tariff rates,
providing preferential access to services sectors, easing investment rules, improving intellectual property regulations,
and opening government procurement opportunities.

The material for all the FTAs covered in this publication is courtesy of International Enterprise Singapore and its FTA
website (www.fta.gov.sg).

1. ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)

2. ASEAN-China Free Trade Area (ACFTA)

3. ASEAN Free Trade Area (AFTA)

4. ASEAN-India Free Trade Area (AIFTA)

5. ASEAN-Japan Comprehensive Economic Partnership (AJCEP)

6. ASEAN-Korea Free Trade Agreement (AKFTA)

 7. China-Singapore Free Trade Agreement (CSFTA)

8. India-Singapore Comprehensive Economic Cooperation Agreement (CECA)

9. Japan and the Republic of Singapore for a New-Age Economic Partnership Agreement (JSEPA)

10. Korea-Singapore Free Trade Agreement (KSFTA)

11. Agreement between New Zealand and Singapore on a Closer Economic Partnership (ANZSCEP)

12. Panama-Singapore Free Trade Agreement (PSFTA)

13. Peru-Singapore Free Trade Agreement (PeSFTA)

14. Singapore-Australia Free Trade Agreement (SAFTA)

15. Singapore-European Free Trade Association (ESFTA)

16. Singapore-Jordan Free Trade Agreement (SJFTA)

17. Trans-Pacific Strategic Economic Partnership Agreement (TPFTA)

18. US-Singapore Free Trade Agreement (USSFTA)

19. Singapore-Costa Rica Free Trade Agreement(SCRFTA)

20. The Gulf Cooperation Council (GSFTA)

KEY POINTS

·1 Singapore’s Ambassador-at-Large Tommy Koh said rising protectionism in the West was a threat to Asia’s
prosperity.

·2 Koh said the trend in Asia was toward liberalizing economies and trade policies.

Rising protectionism in the West has become a threat to Asia’s prosperity, Tommy Koh, ambassador-at-large for
Singapore’s Ministry of Foreign Affairs, said Thursday.

“I worry about the rise of protectionism and economic nationalism in the U.S. and in Europe. I see this as a direct
threat to the prosperity and prospects of Asia,” Koh said at the Credit Suisse conference on megatrends, held in
Singapore.

“Asia has been able to make enormous progress because of the liberal economic order that the U.S., U.K. and other
countries created at the end of the Second World War. And this liberal world order seems to be in jeopardy.”

Protectionist rhetoric ramped up during the U.S. presidential election last year.
Then-candidate Donald Trump ran on a platform promoting “fair trade” practices that would prove better for the U.S.,
with much of the rhetoric aimed at China and Mexico.

Although Trump has since walked back some of the rhetoric – earlier this month he said he wouldn’t label China a
currency manipulator – he has continued to target U.S. trade partners, calling Canada’s actions on dairy a “disgrace”
on Thursday and launching a probe of cheap steel exporters, including China.

David Mulford, a former U.S. ambassador to India during the George W. Bush administration and a Treasury
Department official during the Ronald Reagan administration, shared the conference stage with Singapore’s Koh and
defended the shift on trade.

“The U.S. position over all these years we’ve been talking about has been to promote and assist the rise of other
nations. It is an extraordinary historic performance by a strong country,” Mulford said. “In doing so, we have created
all kinds of rivals and this has caused hitches and glitches and problems in the system, which now have to be
addressed and it’s appropriate that we address them.”

Mulford, who is currently a visiting fellow at the Hoover Institution at Stanford University, which bills itself as non-
partisan but is often viewed as conservative, did not specify what systemic problems he believed needed to be
addressed.

Mulford also went on the attack against claims the U.S. had grown overly protectionist: “There is no shortage of
protectionism in Asia. Let’s be frank about that. It is a major part of the Asian economic approach.”

But Singapore’s Koh was unconvinced.

“It is not fair for you to say there is protectionism everywhere, including Asia, so what’s the big deal about the U.S.
turning protectionist. The trend in Asia is in the other direction. We are opening up the economies, liberalizing,
integrating with one another,” he said. “The trend in America and Europe is a worry, because you are going in the
other way. There is a significant difference between the dominant trend in Asia — which is towards opening up the
economy, liberalizing, integrating — and the trend in the West.”

Singapore and the U.S. signed a free trade agreement in 2003. But more recently, Trump pulled the U.S. out of the
Trans-Pacific Partnership, or TPP, a broad 12-nation trade deal, which the U.S. president claimed was a “disaster” that
would hurt U.S. manufacturing.

Mulford defended the Trump administration’s stated preference for bilateral trade deals.

“Are there benefits to be derived by bilateral trade agreements versus ambitious global trade agreements,” he asked.
“I think smaller countries that are competitive, aggressive confident could do very well in bilateral trade negotiations
and don’t always have to be involved in a large package that makes it harder to negotiate a variety of different things
rather than a one-on-one situation.”

To be sure, some analysts believe the multi-lateral approach is more efficient, as trade deals generally take many years
to complete and small nations often can’t field large teams to negotiate many bilateral deals simultaneously.

But Mulford claimed “world elite” and “negative” media have been preventing discussion of ways to “address the
legitimate concerns of the groups that have been disadvantaged in leading countries like the U.S. by the rise of other
nations and the growth of globalization.”

Singapore’s Koh, however, remained steadfast in criticism of the U.S.’s new trade tact, noting that America had gone
down that road before, with ill effects.

Koh pointed to the Smoot-Hawley Tariff Act of 1930, which increased U.S. tariffs on a range of imports, setting off a
trade war and deepening the Great Depression as by some estimates it halved American imports and exports.
“You’ve been there before and I’m surprised that memories are so short in America and Americans are flirting with
protectionism a second time,” Koh said.

Protectionist measures are dangerous and self-defeating, says Singapore’s trade minister:

KEY POINTS

·3 Singapore Trade and Industry Minister Chan Chun Sing said there are no winners in a situation where
countries impose protectionist measures.

·4 Countries that attempt to go it alone will also find it is “self-defeating,” with increasing inter-dependency
between economies and production chains, Chan said.

It is dangerous for the world’s trading system when countries impose protectionist measures, and even self-defeating
given that production chains are global, Singapore’s trade and industry minister said.

Speaking to CNBC on Tuesday, Chan Chun Sing said there are no winners in a situation where countries impose
protectionist measures.

“This is very dangerous for the entire global trading system because, when one country after another starts to enact
their own protectionist measures using all kinds of reasons, the entire global system will unravel,” he said.

Trade tensions have risen since U.S. and China both threatened tariffs on each other, although there have been talks
between the two giants since.

The U.S. last week said it would proceed with 25 percent tariffs on some $50 billion in Chinese goods, with a final list
of imports to be announced on June 15. China’s Foreign Ministry said Monday it was open in principle to talks with the
U.S. but said any trade and business deals with the U.S. would be void if Washington implemented tariffs.

Last Thursday, the U.S. also imposed tariffs on Canada, Mexico and the European Union.

Countries that attempt to go it alone will find it is “self-defeating,” given the increasing inter-dependency between
economies and production chains, Chan said, citing the iPhone as a product that isn’t produced by any one country.

“It is a global product chain, a global supply chain, that brings this product about to the market. And we will soon
realize that there is no way for us to cut ourselves out from the global production system and it is actually a self-
defeating exercise if we just try to have a me-versus-you kind of mental model,” he said.

Disadvantages of protectionism
Trade protectionism has more than a few disadvantages, the most noteworthy of which are the pressures it places on
the very core principles of free trade. Further disadvantages are the protections it offers to firms that contest on a
stage of price over quality, the incorrect sense of security that it builds and the denial of easy access to certain
products for consumers. At the core of protectionism are tariffs, duties, quotas and any other measures designed to
restrict the import of foreign goods in interest of protecting domestic companies from foreign take overs. More
disadvantages are as follows:
1) Consumers pay more with protectionism. Without a system of competitive pricing, domestic companies are free to
raise their prices without raising the quality of their goods. When a business has no competition then the consumer is
left without options.

2) Businesses suffer from protectionism too. Government support often builds corporate contentment, which could
lead to a business to believe that it has a pleasant safety net set up behind it in the event of strong foreign
competition as these businesses might not have the resources necessary to survive on their own.

3) Trade protectionism limits consumer access to foreign goods and non-domestic companies that offer unique
products and services are also subject to the restrictions.

4) Foreign businesses and domestic consumers face the greatest disadvantages of trade protectionism. Businesses
face imbalanced restrictions while their domestic competitors are offered financial advantages, and the consumer
ends up paying higher prices for a limited variety of products that are not always worth their costs.

5) Protectionism can cause a retaliation reaction from other nations, ruining vital relationships between nations. a
clear example of this would be the relationship between USA and China, when the US put boundaries on the Chinese
tires , China retaliated by putting up barriers against different U.S. goods such as their chicken. This kind of hostility
between nations decreases the specialization between two nations, eventually damaging the economy.

Additionally to all of this, some governments provide subsidies and loans to businesses that are not able to compete
against their foreign competitors. These actions restrain the free market by giving benefits to domestic companies
while creating consequences upon foreign businesses. Some argue that trade protectionism is a step towards anti-
globalization because of these reasons.]