Foundation Hosts Talk on Free Trade

Mr. Barun Mitra with FNF Resident Representative Siegfried Herzog

The recently concluded Friedrich Naumann Foundation (FNF) co-sponsored 8th annual Economic Freedom Network Asia conference in Kuala Lumpur, Malaysia from 12-13 September 2006 discussed the topic: "Preferential Trade Agreements: Local Solutions for Global Free Trade?" In response to bringing free market solutions to where it counts most – at the local level, the FNF Philippine office, in cooperation with the Foundation for Economic Freedom (FEF), hosted a round table discussion with Liberty Institute founder and director, Mr. Barun S. Mitra on 6 October 2006 on "Free Trade and Property Rights."

Economists gathered at the Foundation’s office in Makati City to discuss the cornerstone of the free market: people engage in trade, not countries. “The state is not an economic actor. It is a lawmaker and hence is not an agent of the market,” said Mitra. He pointed out that when governments negotiate on behalf of countries, they can easily be controlled by vested interests. Trade discussions then become a game of political maneuvering, market liberalization can be delayed and only small, powerful groups benefit. It obscures the fact that trade liberalization is good in itself, without depending on others liberalizing at the same time. Therefore, Mr. Mitra argues, unilateralism is the solution to the current vested interests domination presented by a multilateral approach to free trade. "Policy decisions should be made at home. Unilateralism forces that. Whether the decision is to open or close your borders to trade, it should be a domestic decision. It should not be subverted by the state," he said. Mr. Mitra pointed to the example of Hong Kong. Despite its small size, in adopting a unilateral approach to free trade and protecting its market institutions, it has a per capital income of $27,179. Other Asian countries have also liberalized their trade without waiting for others and have benefited markedly.

During the discussion, the issue of intellectual property rights (IPR) was also debated extensively. Mr. Mitra pointed out that a stricter IPR-regime induced Indian pharmaceutical companies to build up their research capabilities, and that Indian software and entertainment companies had become great fans of IPR now that they are internationally competitive.

"We are grateful to have had this opportunity to learn from and discuss with Barun Mitra, a noted intellectual and liberal activist," said FNF Resident Representative Siegfried Herzog. "We are happy that this meeting is also a great continuation of our cooperation with FEF," he added. "We are looking forward to more such meetings in the future."

For more insights into Barun Mitra's ideas on unilateralism, please click here. The original article appears in the Far Eastern Econimic Review, December 2005.