Free Trade is not Free Trade: Industry specialization is the price that outweighs the benefit of FTA

The opposition tried to defend the case of FTA based on the logic that even though there will be natural selection in the private sector competition, but each sector will have a winner. And from that fact, it is sufficient to claim that FTA offers more benefit, often in the form of industrial structure becoming more specialized. There are at least two points that we think why this view can be extremely dangerous. First is the logic of minimizing your risk to ensure sustainability of economic growth by spreading your risk. The opposition used the example of export growth of Thailand’s durian commodity as the success of FTA. Our question is what will happen if say there is a significant drop in durian’s price? What will then happen with Thailand economic growth, if Thailand’s only reliable private sector is from the durian sector? We believe that the opposition example of the economic growth experienced by Thailand through the path of becoming specialized in its development confirm that free trade is not free after all. Second, if in many examples in Africa, a lot of its local industries died because they have not matured when they were exposed to foreign competition. As a result of this, those that survived become too specialized while the others went extinct. The opposition claimed that this will still result in positive gain, but we believe not only the net gain cannot be measured, hence cannot be ensured if positive gain does exist, but also it undermines the value of democracy since the only employment that exists can only be derived from those industry that become specialized. In other words, how can we guarantee the surviving sector will provide as many as employment as those who have lost the jobs from the losing sector? How can we ensure the transfer of skill from different sectors can be ensured? Ghana is one of the example. At least 120 factories since 1988, mainly because of competitive imports. The garment, leather, electrical, electronics, and pharmaceuticals sectors have been particularly hard hit. In 1990, even the New Match Company, the only safety match company in the country, closed.[[http://countrystudies.us/ghana/88.htm]] In 2000, Ghana lost US$43 for every one of its 20 million people. In the same year, Ghana received aid worth just US$31 per person. Over the 15 years since trade was liberalised, Ghana’s population has lost the equivalent of US$510 per person – a huge sum, given that per capita GDP in 2000 was just US$330. It’s as if everyone in Ghana stopped working for one and a half years. [[http://www.christianaid.org.uk/Images/economics_of_failure.pdf]] As the example of Lee Chong Wei that opposition believes can beat the whole UK’s badminton team by himself confirms our notion that FTA for poorer country isn’t a fair trade. Why? Because in the correlation of our MU vs Malaysian national team example, Lee chong wei counts only as one employment, but MU can contribute to eleven employments, not even counting the secondary team. That’s why it’s not fair, we’re talking about 11 jobs as a football player against 1 job as a badminton player.