Countries across the globe have different opinions regarding the two trade practices, free and fair trade. We have seen diminishing boundaries that once separated nations and its people. Many people around the world feel threatened by this global community and free trade. They are worried that globalization can lead to their people being laid off. Therefore they initiate many protectionist measures to stop the expansion of globalization and to shield their domestic industries.

On the other hand, free trade which is achieved through international trade liberalization can be a great benefit for developing nations. Free trade can allow these countries to gain higher profits when they export to developed countries. This article gives an insight on the reactions from various countries across the globe regarding free trade and protectionism.

Europe

An example of fair trade is the protectionism in Europe’s energy market. France’s Gaz de France merged with its compatriot, Suez to thwart a rival bid from the Italian energy group Enel. Similarly Spain came up with an energy legislation to prevent Germany’s EON from acquiring Spain’s Endesa group. This national protectionism, also known as ‘economic patriotism’ is a setback to globalization and free trade.

As foreign direct investments flowing into Europe have been stagnating because of increasing investments in Asia and Eastern Europe, some economists are of the opinion that a protectionist attitude could impact Europe more negatively than positively.

United States

The question of Free and Fair trade has mixed views across the US. Traditionally the US has been in favour of free trade. It has signed Free Trade Agreements with a large number of countries. Mass outsourcing of jobs and declining wages are forcing the United States to consider protectionism as the option to revamp the economy. One also has to consider that the shift from a manufacturing based economy to a service based economy has caused a great loss of low income jobs to the US.

China

China is one of the fastest growing nations in the world. This country is striving hard to create maximum Free Trade Agreements with countries in East Asia. US used to be the main export market for South Korea and today China has claimed this position. Due to its rapidly rising trade surplus, China is under pressure to make its imports more expensive and US exports cheaper.

Mexico

The Free Trade Agreement between Mexico and the European Union agreement will have a significant impact on the relationship between Mexico and the European Union in years to come. The agreement would reduce Mexico’s reliance on NAFTA and the USA and open its doors to the world. Mexico is the only NAFTA member that will have free access to EU Markets (which is a bigger trading block than that of NAFTA) in the coming years.

On the other hand, companies in the EU will also have access to markets in Mexico and its resources and capabilities. The agreement provides for tariffs on a wide range of goods and services to pass freely between Mexico and the EU and vice-versa. According to this agreement, all the goods and services, except those that are covered by specific restrictions will pass through with zero import/ export tariffs assigned to them.