Free Trade Agreements

Nobel laureate and former World Bank chief economist Joseph Stiglitz believes that no country should enter into free trade agreements with the US, as none of the developing countries has benefited greatly from them.

Discussion: Stiglitz warns against signing FTA's with the US

From http://www.bilaterals.org/article.php3?id_article=9510:

"Q: What about free trade agreements (FTAs)? We are concerned about being less attractive to foreign direct investment, and now we seem to be moving along the path of signing bilateral agreements with other countries, especially the United States. What are your views of bilateral agreements between developed countries and developing countries? Are we better off without them?

A: Overall, bilateral agreements have been a disaster, for the developing countries and for the global trading system. The global trading system is based on principle of non-discrimination, which is called the most favourite nation principle. These FTAs are creating a world in which there are two groups - the first consist of “my friends who can get in free” and the other, consist of countries that have to pay tariffs. So, it is a disaster.

Secondly, bargaining between the United States and developing countries is not bargaining. Especially under the Bush (administration), it has been a take-it-or-leave-it situation. The provisions, the way I see them, have not benefited most of the countries in significant ways. In fact, these countries lost a great deal, especially access to intellectual property.

They have more difficulty accessing to knowledge and particularly, generic medicine. So, there are thousands of people dying in developing countries because of the trade agreements with the United States. They don’t want to talk about it that way, but that is what is happening.

Q: Should we walk away from these agreements? A: Yes. The good news is, the tariffs now are so low, that they no longer serve as an impediment to trade. If you have good infrastructure and educated people, they will come to Malaysia (to invest). The tariff of 3%-5% is not going to make any difference to the friendly business atmosphere, which Malaysia has.

Q: So, that means FTAs are not about trading goods?

A: It’s not about trading goods; it’s about losing sovereignty. And it’s about helping American drug companies. It’s about America pushing for a particular agenda. It has not benefited any country. In fact, the free trade agreement with Mexico was the strongest, but the gap between Mexico and the United States increased in the first decade.

They are not free trade agreements. They are not about free trade, but they are advantaged trade agreements. And they managed to advantage the United States at the cost of the developing countries." (http://www.bilaterals.org/article.php3?id_article=9510)