The issues of free trade, fair trade and international trade relations have received increased attention in the media recently as the world comes to terms with the European Community (EC), the North American Free Trade Agreement (NAFTA), the General Agreement on Tariffs and Trade (GATT) and the trade imbalance between the United States and Japan. There are questions regarding the benefits of free trade, the unfairness of "dumping," price fixing, subsidies and quotas, and concerns in the business community about the long-term effects of having a high trade deficit with Japan. Dr. Ravi Batra addresses the issue of free trade in his book, The Myth of Free Trade. This research examines the ideas that Batra puts forth, the theories he covers, and the overall usefulness and applicability of the book in today's business world.
Batra is compelled to write this book, which he recognizes flies in the face of conventional wisdom, because he believes that he sees trends that the economic hierarchy does not see. He cites his 1970s prediction that communism would end by the turn of the century, and his 1980s work on the coming recession, as cases in point where he has spoken as a voice in the wilderness against economic gospel and been correct. It is against this backdrop that the author takes on the issues of free trade and protectionism.
The author's basic premise is that the virtues of free trade to the United States have been overstated. The American practice of free trade has benefited other countries, but not the United States. While proponents of free trade extol the potential benefits, they ignore the problems that free trade has brought about, and do not consider the long-term ramifications of attempting to continue to compete in a world that is decidedly not practicing free trade on a global basis.
Part of the problem that Batra sees is that there has been a move away from manufacturing toward the service industries. Batra...