It is a mixed bag on free trade. While agreements are being stalled in the US, across the other side of the globe the Association of Southeast Asian Nations (ASEAN) are deep in free trade negotiations with Australia, New Zealand, the EU and India. They are also implementing a free trade agreement with Japan, which will make 90 percent of trade tariff-free inside of 10 years and have signed a deal with China to create the biggest free trade zone by 2010.
So while much of the East is opening up, the West is closing its doors. An article by Avi Salzman in Business Week considers the reality on the ground for businesses in the US wishing to export. For the company Caterpillar – which assembles trucks of behmothian proportions – without the Colombian free trade deal, they face a tariff of $180,000 on a $1.2 million truck. Doug Goudie, director of international trade policy for the National Association of Manufacturers, is concerned: “Every day that goes by, we lose the opportunity to export manufactured goods".
With the next round of world trade talks starting up, it is time for ministers to step up to the plate and liberalize global trade. As The Economist reports: “Yvan Decreux and Lionel Fontagné, of CEPII, a French economic research institute, have tried to measure the effect on global growth. They estimate that the world economy would eventually be $43 billion a year better off. Throw in some liberalisation of services too, and the sum rises by $30 billion."
In fact, as The Economist acknowledges, the financial gains would be much greater than this. All we need now is for the politicians throughout the world to sign up to free trade. I am not holding my breath...