The government’s current trade policy of massive imports like rice, exports of raw

materials such as precious metals and the country’s specialization into labor kill local

industries and set us up for economic traps, while not reducing poverty effectively.

1. Undermines national security – cheap rice imports effectively kill local rice

production. In case the importer experiences a massive shortage, our country

would have no other alternatives because of our lack of support for local

producers.

2. Dependency theory – free trade extends our country’s colonial subjugation under

more powerful nations. They extend their bargaining power to get exemptions to

our laws while we cannot do the same thing to theirs. In effects, we are

commercially put under colonization.

3. Stability – our specialization in labor without further investments in fields like

agriculture and manufacturing exposes us to instability should the demand for

labor drop abruptly. We should gain expertise in other areas even if these do not

pay off in the short run.

4. It does not allow local industries to grow – cheaper imports hurt our local industries

that cannot drive down costs quickly. The local shoe industry was decimated by

the influx of cheap Chinese shoes. The government should subsidize local

industries if imports are inevitable.

5. The technological gap widens – our participation in the global supply chain is

mainly through labor and not technology. Other countries gain technological
 expertise resulting to their greater prosperity. Investments should be made towards

technology to match the improvements in other countries.

6. Resource curse – over the years, countries supplying raw materials have

developed way less than countries providing manufactured goods. Natural

resources are highly dependent on world prices and no value is added in exporting

them. We should instead process raw materials into finished products prior to

exporting them.

7. Increased global connectivity increases risk – the interconnectivity of national

economies and their further specialization expose these countries to a domino

effect of financial crises. An abrupt change in supply or demand in one country

may have shocking consequences in another.

8. Poverty is not solved – theoretically, trade benefits all nations, but wealth gained

from trade is not distributed equitably in a nation. It practically benefits only

individuals and not a country’s neediest citizens. Instead, it widens the poverty gap

in a certain country, exasperating its domestic problems rather than alleviating

them.