How free is the free market?

Alazar K

‘...What rich countries fail to
realize is that fairer trade is
not just an opportunity
for Africa but for all
countries- even them…’

Globalization, trade and the free markets are the talks of today. Many envision or talk about a future where people of different nationalities and cultures will be able to share and trade resources across boundaries in a manner that will benefit all of humanity. But, how fair is trade when a nation's own global trading policies together with international corporations' desire to increase their profits result in manipulated international trade pacts and agreements, so that they are most favorable for themselves? How free is the free market? Why do the poor get poorer and the rich get richer?
Except for religious conflicts and the petty wars of feudal lords, wars are primarily fought over resources and trade. President Woodrow Wilson recognized that this was the cause of World War I. He said “Is there any man, is there any woman, let me say any child here that does not know that the seed of war in the modern world is industrial and commercial rivalry?'"
Sir Shridath Ramphal also said that "Never before have so many people had so much in common, but never before have the things that divide them been so obvious."
A lot of overbearing regulations can give too much power to a few, and potentially corrupt ruling regime and prevent innovative ideas from flourishing. It can perhaps be an obstacle for a foreign nation to invest in a country due to those conditions and regulations which increase costs.
However, too much deregulation can lead to corporations being able to undermine basic social and human rights as well as lead to environmental damage, often without accountability. IMF-imposed structural adjustment and their pushes for deregulation has also led to further poverty in some countries.
The correct balance is difficult to reach due to the inherent power conflicts between the various bodies involved. This leads to a lot of unfairness in trade and basic human rights for which the majority of people end up paying the price. For example, some believe that one of the main problems causing the 1998/99 financial crisis around the world is a lack of global regulations to help protect developing nations as they enter a global market. Even the World Bank has cautioned that globalization and localization (the increasing demand for local autonomy) can pose problems as well as offer benefits, if not handled properly.
There is already a growing fair trade movement around the world, where local producers are able to fairly trade their products. However, it isn't always easy to maintain that when globalization, in its current form, does not seem to favor those who want trade to be fair.
Child labor is not an easy issue to resolve; while it seems noble to immediately withdraw investments and cooperation with firms and factories that employ child labor it may do more harm than good. Many of these children are from very poor families and work to pay for their family and/or their education. Depriving them of this income has led to some children seeking different, lower paid work, and even prostitution in some cases. Other ways with schemes to help children would likely be needed so that this labor can be phased out.
The same has been suggested by the International Labor Organization (ILO), at a meeting in Mexico City in 1999, who also pointed out that child labor affects over 250 million children, 30 percent of which are in Latin America. A gradual phase out is said to be a more preferable solution.
According to the UK Committee for UNICEF, poverty is the most common factor contributing to child labor. In addition, "debt, bloated military budgets and structural adjustment programmes imposed by the International Monetary Fund and the World Bank, have eroded the capacity of many governments to provide education and services for children, and have also pushed up prices for basic necessities".
According to UNICEF, Somalia and USA are the only two countries in the world that have not ratified the United Nation's Convention on the Rights of the Child. The convention is the world's most widely ratified treaty.
Rich countries are very interested in talking about the importance of trade as the primary motor of economic growth in developing countries, yet there's been no real action because these rich countries heavily protect their own markets against exports from the poorest countries through import duties and quotas. Furthermore rich countries continue to subsidize their own agricultural sectors to the tune of a billion dollars a day, making it impossible for African farmers to compete internationally. What rich countries fail to realize is that fairer trade is not just an opportunity for Africa but for all countries- even them.
Africans in turn know they need to diversify their exports from unprofitable basic crops such as coffee and cocoa and into products which earn more money such as clothes, textiles and manufactured goods. But Africans could also earn more from basic crops if they were allowed to process these for export.
For example Ghana can export raw cocoa duty free to Europe, but a 25% tariff is imposed if they process that cocoa before exporting it to Europe. It is this processing (tinning, roasting, labeling) which helps a country earn more money and develop its manufacturing base - and which allows its economy to grow. While fair trade could be Africa's ticket out of the vicious cycles of poverty, unfair trade rules like these trap Africa at the gates.