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Some years back, free trade discussions caused a heated exchange during the world trade talks when an American delegate suggested that China in the future will not be able to feed its own population and therefore should open up its borders for trade. This greatly angered the Chinese delegate who shot up and said that china has enough food to feed its people for the next fifty years.

Today, China is the new centre of the world in terms of trade and commerce, Every day there are new millionaires being created much to the joy of the countries citizens. China has also started looking around the world for new sources of raw materials and markets for their goods. Africa has now became a prime target and this has provided an alternative for the African continent to trade with in respect to the arm twisting western world. This as indeed made everyone happy except the west.

Firstly because there most reliable source of raw materials, is having another credible buyer to sell to their role materials. This means that the west will soon get starved of raw materials crippling its production of finished goods. At the same time, the west is also likely to loose a crucial market for its products as Africa turns to China. Worse still, since governments are now free from the powerful effects that sanctions have had on them, they are now able to continue with social injustices to their local populace and to fund activities that can lead to terrorist activities. From such a point of view, the possibility of free trade can be indeed frightening for the west and in the long run the rest of the world.

From another perspective, free trade is a good for the African continent since it now has to markets to sell to its products and therefore can demand for higher prices from the buyers. At the same time it is able to import goods at cheaper prices and of higher quality since the west and china must compete to attract the african market. The net effect is that the Africans gain by having achieving higher standards of life through higher incomes and cheaper imports.

Africa, for example, has set a target to achieve the millennium development goals by 2015 but has come to realise that that will be possible only through greater access to foreign markets. With free trade Africans can gain entry to rich European markets and thus increase incomes for their peoples. On the other hand if the western countries open up their countries to free trade, they risk removing all forms of protections like farm subsidies that they give to their citizens and therefore cause increased competition and lower incomes for their populace.

But can that risk justify the global trade imbalance? No! in fact with free trade, the west is likely to have increased incomes since they will become the chief exporters of money to fund the increased global productivity as is the case with the new Chinese boom. Free trade in fact will enrich improvised communities who will in turn purchase more products. Free trade is the true fulfilment of the principle of comparative advantage only in this case people from different parts of the world will all participate by producing different goods and items for one another.

I therefore believe that by introducing free trade, nations and peoples will become more prosperous and able to address other social imbalances. The case of Bangalore,India and the outsourcing boom is a good pointer to this over and above the Chinese example. The best way to increase free trade is by demolishing country borders which create the trade barriers in the first palce and thus establish one global nation. That way free trade will thrive.

Learn more about this author, Magu Nguru.
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