Free Trade essay

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History has proven that poor countries can only develop and achieve their desired economic levels through trade. Success stories of countries such as Chile, China, Singapore, which were at one time considered poor, have realized economic growth due to embracing open trading policies. The surplus funds they always generated during the transition made them respond amicably to the crisis that other nations faced, especially the recession. Farmers in poor countries experience difficulty in exporting their goods, and also in penetrating the global markets. Barriers exist, and the international organizations help farmers to manage them (Anderson, 2012).

Farmers always face many marketing constraints. They include high costs of marketing, which emanate from extremely poor transportation, and lack of substantial information on available markets. Poor government structures and policies also contribute to these high costs. They reduce the effective “price” set in the market that farmers receive for all the products they sell. Those leaving far from designated markets and roads can only sell and produce to their immediate customers. Another issue is that these poor farmers can only produce small amounts of products to sell. Their production capacities are limited to their ability of purchasing the necessary raw products and transporting them to the market. Production risk plays a significant role in constraints towards exporting their goods.  They fear to grow various products and try out new crops. They depend on the information they have and rely on the certainty within their area of production. They are rigid and cannot take risks. Production of perishable products calls from market risks. This means that these poor farmers fail to grasp the niches and gaps in the markets (Anderson, 2012).

There are many barriers that farmers face while exporting their products. Tariff Barriers occur in two folds:

  • Developed countries always impose high tariffs on imports from developing and less developed nations. The tariffs that the less developed nations face are five times higher than those that the developed countries face. This brings about many cases of the limits to the participation of these poor nations existing in the markets.
  • Tariff escalation discourages the diversity that is desired into high VA activities. The tariffs that are imposed on existing raw materials are always low, but the subsequent rates often have an increase on the final products.

Agricultural trade and also subsidies from rich countries affect farmers. The European Union has a policy, where it intervenes into the market prices in order to protect buyers as well as farmers. The surplus products that come out of this are bought by the European Union authorities. This means that export duties are mandatory for any products to be exported.

International organizations can help these farmers if they ensure that free markets are there. This will only happen if they address the reforms of the economic policies. Maintaining the exchange rates at a favorable level for all players in the markets is necessary. There should be a balance between the various currencies hence reduction in the tariff barriers. The United States is a super power and it affects the trading markets. If these organizations can advocate for better US trading policies, it will ensure that only few barriers exist in the markets. Countries which imitate the US trading policies should be enlightened on what they entail (Anderson, 2012).

Protection of poor farmers from the developing countries, at all levels of production and trading, is necessary. Most of their products are enjoyed worldwide. They are fundamental to the success of the world economies and trade markets. World organizations should play their part in ensuring that no barriers exist that will hinder the free participation of these farmers in the world markets and trading. Calls for globalization should be embraced and hence free trading.

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