Free Trade Analysis

Overview

The discussion of the issue of free trade within the historical context of the Corn-Laws debate in Great Britain circa 1845 highlights a contentious issue that has caused debate to rage among governments, politicians and economists for centuries. As early as 1662 Gerard de Malynes suggested to King James that:

“That all the said causes of the decay of Trade in England, are almost all of them

comprised in one, which is the want of money; whereof wee finde the abuse of exchange, to bee the efficient Cause, which maketh us to find out so easie a Remedie, whereby the Kingdome shall enjoy all the three essentiall parts of Traffique under good and Politike Government, which will bee Free Trade effectually or in deed. And this will also bee admirable in the eyes of other

Princes…”

As noted by Milton and Rose Friedman in 1997, it is ironic that this debate still rages in spite of overwhelming acceptance by a large majority of the economic community. They go on to note that tariffs have “generally been the rule” in spite of the general economic thought. “The only major exceptions are nearly a century of free trade in Great Britain after the repeal of the Corn Laws in 1846, thirty years of free trade in Japan after the Meiji Restoration, and free trade in Hong Kong under British rule.”

Toward the latter part of the 20th century free trade expanded greatly as evidenced by the formation of the European Union, a number of regional free trade associations in the Asian arena and the formation of NAFTA between Mexico, Canada and the United States. In spite of the fairly rapid growth of free trade as an portion of the global economy, and further in spite of some significant levels of evidence that free trade has had a generally beneficial impact on the economies of countries practicing its principles and of the general population within those countries there is still significant disagreement in many quarters concerning the merits of the free