Example of bad trade policies hurting people

I was once an opponent of free trade. It ruined lives by shipping jobs overseas. Nothing would serve but to have high tariffs on all imported goods so that we could protect American jobs.

Then I started to live in countries with high import tariffs designed to protect local jobs. And boy oh boy did my views change.

In Mexico, Jamaica, Taiwan, China and now Brazil I saw how people have to pay a lot of money to buy crappy goods. Or they pay A WHOLE LOT MORE to buy imported goods.

The latest example is the Apple iPad. The wonder toy of 2010 went on sale in Brazil Dec. 2. And it flew off the shelves. But it costs about US$1,000 for the base model — or twice as much as a U.S. iPad.

Don’t Go to Brazil for a Deal on an iPad

The massive import tariffs keep middle class people from being able to buy a reasonably priced car or a computer. Only those with the income to fly to the States or Europe are able to buy electronic goodies at a more reasonable price.

BTW, Brazil is #2 in the world for having the most expensive Big Macs.

The Economist each year uses the tongue-in-cheek Big Mac Index to plot a country’s currency. We all know the value of a Big Mac in the USA. And the Big Mac is the same all around the world. So any variation in price means there is an issue with that country’s currency policy. (Another issue affecting trade.)

Imposing excessive import duties and manipulating currencies are what governments do to control access to material and goods. The end result is that it is the working class and the poor who suffer the most.

People must spend more money on poor quality goods. And may not even have the ability to buy something — like an inexpensive but quality computer — that can help them improve their lives and the lives of their children.

It might look great for short-term politics but the real cost of high tariffs and closed markets is the future of that country.

In a way, the Economist made it easy to describe how trade and currency policies affect everyday people. It is really not that hard for a LOCAL journalist to see how or where GLOBAL events impact the LOCAL community. It just takes a bit of imagination and willingness to understand that the LOCAL is tied to the GLOBAL.


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Filed under International News Coverage, Trade

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