Free Trade or Unfair Trade?
One of the biggest benefits of free trade and the work of the WTO, IMF etc. is how it helps nations forge new trade deals and links easily:
•EU and Vietnam trade deal in August 2015 removed all import tariffs and quotas on trade
•EU gain easy access to trade with 90 million consumers (electricals, aircraft, vehicles etc.)
•Vietnam gains access to over 300 million consumers (clothes, coffee, rice etc.)
•Prices in the EU become cheaper with lower prices now too!
One of the biggest criticisms of free trade (removing trade barriers) and the work of the WTO, IMF etc. is that it is not actually very fair.
•Western nations and trade blocs (e.g. EU) insist on LEDCs removing trade barriers (tariffs, quotas etc.) but still use them on LEDCs
•This means that MEDCs have easy access to LEDC markets but not vice versa – no level playing field
•E.g. The EU sets a tariff on processed cocoa to prevent Ghana imports undercutting EU firms but Ghana is not allowed to subsidise its farmers or put tariffs on western food