In the 20th century where several countries provide its citizens access to high quality and low-priced goods. Where some countries enjoy efficiency and innovation while some countries are still found to be struggling to rise. I often wonder considering the situation of countries such as Zimbabwe and Afghanistan that why do some countries have the privilege of relishing all the facilities while some countries enjoy none. This question kept revolving in my mind until I realized that the answer lies in free trade. Taking in account the condition of the world the topic of free trade greatly interested me and hence I decided to do a GP report on it. Free trade is trade without taxes and tariffs and it is done to help and stabilize the developing and poor countries. trade is considered as an engine of growth so free trade results in more growth. It causes more competition among countries. The economy of the country gets boosted. However, at the same time free trade also results in inequality between nations, difference in wages and competition for jobs. As a result of free trade goods are transported more efficiently however these increased efficiencies do not come without hardships. One effect of this “increased efficiency” is lowered wages on all sides of trade borders.
According to the National Council for the Evaluation of Social Development Policies due to free trade in Mexico 53 million people are poor. The workers get $50 for a week after working for 11 hours straight and hardly 30% of the population gets paid holidays . After the implementation of NAFTA what has been found is that skilled and educated people have high wages while the poor and unskilled labour is being neglected. As predicted by Ross Perot NAFTA has led to nothing but the worsened conditions of labour. It has become a very tough task to get jobs in Canada coupled with low wages. In Canada people are now struggling to buy even basic necessities such as clothes because the minimum wage of $15 has been replaced by $10.25 per hour. China is involved in several free trade agreements and it has gained a lot of profit but it is insufficient for people. After working tirelessly for 12 hours in poor working conditions all that the people get are 3614 yuan for a month. Pakistan is involved in free trade agreements with many countries namely Sri-lanka and Malaysia, however the most popular is china. Pakistan exports mainly raw material and imports high value-added goods, which lead to the country’s balance of payment to be negative.
Moreover, there is very less variety of goods Pakistan exports and mostly the goods don’t fulfil the international requirements which is leading to downfall of economy. The sports industry in Sialkot bagged 70-80% orders during 1998 and 2002 world cups but in 2010 world cup received only 30% orders globally as it does not fulfil the requirements globally. The labour receives $1100 annually which means that monthly income is hardly 12000PKR. The condition too is exasperating and the only ventilation is from holes in the ceiling. In the brick kilns industry, the situation is extremely defected. In Islamabad, the workers don’t get 517PKR for every 1000 bricks made and in order to run their families they take loans, and in order to make the payment of loan they are forced to sell their kidneys. In Peshawar, women are not able to earn more than $3 per day and sometimes when it rains and they are unable to work, they are not given any money and they go to bed hungry. Pakistan has the hegemony of being the sixth largest producer of dates. Khairpur in Sindh is the major producer of dates. However, the wages are not sufficient for the labour. People involved in transport of dates earn 350PKR, while those who climb trees and pluck the dates earn the maximum income 700PKR, and the women earn the minimum amount 250PKR per day. In my locality of Lahore, the condition of leather industry which makes garments and accessories and exports them to the EU is threatening. The workers earn only 14000 rupees a month which are not sufficient to run a family. As a result, the parents are forced to send their children to work. This increases child labour.
The conditions of textile industries are not favourable for the labour. Their wages are not fixed. The workers are not granted sick leaves and paid vacations. Sometimes the labour has to work beyond the work timings. The workers are payed only 400-800PKR per day which deteriorates their financial conditions and makes it hard for them to run their families. The labour costs hardly make up 5-8% of the total cost of production. In fabric industry a power loom worker generally earns 7000 or 7500PKR per month depending upon the metres of cloth they weave. This wage is not adequate and if we divide the wage to three people in a household, it is equivalent to less than 100pkr a day. Free trade leads to many more issues in essence the immense lack of jobs. At the current time 250 million people worldwide are unemployed. There has now been a decrease in job opportunities because we can now easily import the things we require, so there is no need to set up industries for manufacturing material we can import, as a result people don’t have jobs. Moreover, because of the machines we make or import now only 3-5 workers are required to function it thus leading to lack of jobs. Youngstown, USA is one of the places affected by free trade. After the world war 1 the manufacturing was shifted abroad, making 50000 people jobless. In Pakistan even the educated children for example engineering graduates fail to get good jobs and they have to emigrate to other countries in order to achieve job of their expectations. Free trade also leads to degradation of the environment because it allows companies which have no environment modulation to manufacture goods in other nations. As a result of NAFTA, the demand for metal ores and timber has increased, and highly calamitous operations have taken place in Mexico, therefore causing extreme environment degradation.
In Islamabad, the steel mills have been found polluting the area and increasing the carbon content in the air. The people who live in the vicinity of these areas also have to face air and water pollution. Another issue caused by free trade is the destruction of cultures. People are influenced from other cultures and adopt other cultures, forgetting their true nationality. The FTA’s of Australia with other countries deeply affect the cultures of different countries. People are impressed by Australia’s local TV programs and have to pay quotas on it. Moreover google, Facebook, amazon, apple are the bestselling apps used worldwide. In Pakistan too the culture is affected by free trade. Pakistanis are one of the most complexed group of people. Our traditional dressing is completely vanishing and now people prefer and take pride in wearing jeans and short shirts. The traditional food too has lost its value with growth of restaurants such as KFC, OPTP and MC DONALDS. The most important complication originated from free trade is reduced wages as many more problem rise because of it. It deprives people of their basic human rights. They are not able to afford quality food, clothes, education. The people don’t have the privilege to relish health facilities, in order to get out of this situation people adopt illegal means of earning money thus destroying the peace of the society. It also creates distance between parents and children as parents are out, working whole day for little money.
Parents have little time to look after their children. Living in poverty deprives children of their youth. The lack of jobs too is caused by less wages as the wages don’t fulfil the requirement of people. Moreover because of poverty, the children are illiterate and don’t fulfil the job requirements of companies that offer good salary. Poverty causes environment degradation as the farmers, villagers, miners are all illiterate and they have no idea of what they are using and what adverse impact it might have on the environment. To improve the condition of Pakistan and to make free trade move beneficial for our country, the government should reenvision its global and regional trade policies. It should promote more trade with central Asia and India by opening more trade routes. Pakistan must reconstruct its tariff collection and protectionist policies which are undermining the ability of Pakistan to compete in the global market. To maximize the potential Pakistan should allow industries and infrastructure to work in a favourable environment. The most important step that we can take to promote out trade is to invest in vocational training and education. This will help to make the labour skilled and meet the requirements of the private sector.
The government should make more trading schools as it is crucial to have a flexible education system in order to succeed in trade. The literate labour would be more aware and would have a deeper understanding of trade and would be able to come up with adequate trading policies. They will be able to do trade in a way which does not erode the environment. Education would also have a favourable impact on the society. The children would know better than to follow western cultures, they would take pride in their own culture and wouldn’t feel hesitation speaking their national language and wearing traditional clothes because if we don’t own our country, a 10PKR Pakistan badge on our shirts and cars certainly means nothing. As children can contribute in developing our country by educating young minds. Taking advantage of social media, we can create fund raising pages on internet. We can sign petitions on ‘THE MALALA FUND’ website and donate directly to it. We can save some part of our pocket money and donate it to UNESCO. These organizations work to promote education of young children especially women. Free trade is without a doubt a helpful process through which we can do trade without barriers. It can help Pakistan make an ample amount of money only if we follow the rules of WTO. If we start producing more value added good, standardized products and import less costly equipment we can sore high and our balance of payments will once again be in positive. Therefore, I can conclude that free trade is among the few things that are both constructive and destructive, it depends on how we make use of it to increase our economy.