Photo Attribution: Ph_general_map.png: Seav (=Eugene Villar)derivative work: Kpjas at pl.wikipedia / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)
There is no doubt that free trade provides enormous benefit to societies, by stimulating foreign investment, ramping up exports, and increasing the amount of goods and services available. That is why economists have been advocating free trade policies since 1776 when Adam Smith produced his landmark book on capitalist economics, The Wealth of Nations. To see this phenomena in action all you need to do is look to the four Asian tigers. Taiwan, Hong Kong, South Korea, and Singapore. These countries are all extremely wealthy and are hubs for tech and manufacturing. Compared to their other Asian neighbors such as the Philippines, or even China, their standard of living is much higher for all of their citizens. The fact that these countries are so well developed is extraordinary given the fact that they were not at the centers of the European dominated age of industrialization. Their rise to global prominence can be attributed to nothing less than free trade which has bestowed economic well being on every country that it has touched throughout the modern era.
Despite the benefits, free trade also creates a huge amount of interdependence among countries which is sometimes a dangerous prospect. Given this fact, the outbreak of Covid-19 begs the question; How reliant do we want to be on China? This is a country who is encircling the sovereign country of Taiwan, asserting its power in the South China Sea, and expanding its international possessions so as to increase its global dominance. In fact, the alarms were being raised at the outset of this pandemic that China would block pharmaceuticals to the U.S. of which they control an immense supply. Although they have not directly blocked these goods the New York Times reported that at one point they actually cut off the exportation of face masks.
Given the fact that the communist regime which holds power in China committed a massacre in Tiananmen Square and prevented its own citizens from spreading the word about the coronavirus it seems extremely short-sighted to place our fate in the hands of a government hungry for global dominance. The benefits of free trade, as we know, flow both ways, and it is important not to lend our hand to a country who has taken aggressive action against its neighbors and oppressed its citizenry.
After this crisis is behind us it is important that the U.S. stop handing lucrative trade deals to China. According to the World Bank China has 373 million people living below $5.50 a day despite the fact that they have the second largest economy in the world. This extremely low level of income seems incompatible with the size of the Chinese economy.
The U.S. should instead move a majority of its manufacturing plants to the Philippines which will provide the benefits that come along with cheaper goods as well as curb China’s regional power. The Philippines is a perfect candidate for setting up U.S. owned factories, due to the fact that according to the World Bank they have a very stable economy which was previously expected to grow 6.1% in 2020 and 6.2% in 2021. This economic stability is an extremely important indicator of political stability which is a necessary prerequisite for any investment within a region.
Additionally, it is important not to give trade deals to countries who let their citizens live in squalor such as China does. The Philippines would also alleviate this moral issue associated with free trade, because of their concern for the quality of life of their citizens. In fact, the Philippines has actually promoted overseas employment since the 1970s in order to increase the economic well being of its citizens, despite the obvious effect of brain waste which causes highly skilled workers to leave the country. This has made overseas remittances an integral part of the country as about 10% of the population works abroad.
The benefits both morally and politically of moving manufacturing operations to a less aggressive Asian country are numerous. By providing the Philippines instead of China with trade deals, we would alleviate the potential of China using its economic power to cut off valuable supplies to us and we would illustrate to them that we do not support their aggression in the South China Sea. We would also provide a country who has been struggling to provide for its citizens with economically beneficial industries that would alleviate poverty in the region and prevent worker exploitation.
Your humble servant,
Silence Dogood
Very good article. Let’s hope the right people see!!!