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The deceptive promise of free trade | DW Documentary

May 31, 2021

free

trade

with millions of tons of goods moving around the planet brings prosperity or so we are told protectionism and isolationism are evils of the past or they were until Donald Trump called for tariffs on steel imports to the US Europe and China threatened retaliation. We are on the brink of a full-scale

trade

war. First, I am going to sign an executive order to ensure that we fully collect all duties imposed on foreign importers who are cheap, applaud, how are we being deceived when it comes to global trade and what role do we ourselves play? in that deception sir subcommittee Germany cannot expect the rest of the world to buy its products and at the same time remain reluctant to buy products from abroad the arguments for and against

free

trade are full of contradictions The Germans are proud of the ranked countries at the top the top of the list of exporting nations apparently unaware that free trade destroys livelihoods at home and abroad The David and Goliath situation the choice of which in this case is really a twist because bogi I think the polls show who the real winners are and it really is free trade.
the deceptive promise of free trade dw documentary
As free as it seems, from here the port of Hamburg sends German products to countries all over the world. In exchange, around nine million containers arrive here every year, most of them from China. The northern German city is the gateway to Europe for goods from Asia. and when entering the EU, many products are subject to import duties. Cars from Asia and the US pay a 10% tax. Clothing, 12%. Smartphones are subject to tax on all customs duties. They are complex. There are thousands of different types of terrorists in countless variations. Gabi Agents. Anson and Ava Hoffmann from the port's central customs office import chicks every day it is their job to make sure the goods are declared correctly there are a lot of loopholes yes it says it is a microfiber coat for a pet that is made of polyester fabric exactly the Size I would say it is supposed to be for a dog made in China and they are different sizes.
the deceptive promise of free trade dw documentary

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the deceptive promise of free trade dw documentary...

This one is apparently for a medium sized dog. Dog coats also have leather parts. In that case, they would be charged at a lower price. The tariff is 100% polyester, so right now that means a 12% import tax. If these were saddles, it would only be 2.7%. They have no idea what is behind that difference. It is a decision taken at EU level. The only thing they do is verify the contents of the containers. I have been working here for a long time and working here you feel that Germany is not the main exporter in the world, but that most things come from China.
the deceptive promise of free trade dw documentary
The Chinese make practically everything. The question is: do import tariffs bring benefits outside the government's coffers? I suppose they protect a country's internal economy. It's true? What role does protecting domestic industries play in an era of global free trade? We have come to the town of Huber Cowson in the German state of Tearing, where the Renner volcano company, Morita, is located. and Centurion, the former cyclocross standout rider, was the man who brought mountain biking to Germany in a big way. Today he is a successful businessman. The company offers a range of models and business is booming.
the deceptive promise of free trade dw documentary
Where do bicycles come from? This bike is made in Germany. No. it is not made in Germany, but it is a German brand, yes it is a German brand, so where does Tom's frame come from? Like so many things, the frame comes from China. It is painted and assembled in Taiwan. QA. Everything happens here with cobalt and there is still total control here. a bike designed in Germany assembled in Taiwan from components made in China manufactured this way a bike like this pays a 15 percent import tax when it arrives in the EU, but if it was shipped directly to Germany from a factory in China , the importer would have to pay almost 50% in punitive tariffs.
Why can a Chinese company manufacture bicycles at much cheaper prices than a German company? In twenty years of growth, it could become the world's largest leading bicycle manufacturing company in this promotional video. Chinese foucha dirt flames bicycle manufacturer has the world's largest bicycle factory, first-class production technology and more than 100 robots. Welding machine companies like these are subsidized by the Chinese government, but that is only one of the reasons why Chinese products are so cheap, there is also scale that creates miracles with a production capacity of one hundred million. bicycles per year China could quickly flood the world with its products companies like full gung Renner's would go under, so he believes that import tariffs protect the European bicycle manufacturing industry protect Johnny Smooth sometimes you have to have protectionism , it is inevitable, the point is that in business a level playing field is needed, it can also be seen in other areas where government subsidies prevent other manufacturers from competing because the market is distorted, so it is about employment in Europe , sure it's about jobs and fairness, import duties ensure that Chinese bikes are more expensive when bought.
In Europe, punitive tariffs are a form of pure protectionism, but there are ways around them, for example, having bicycle frames produced in China be finished in Taiwan, then punitive tariffs do not apply; the final assembly of bicycles made with Chinese frames takes place in Europe. It is an industry that provides 100,000 jobs on the continent. Raynor is happy that protective tariffs are keeping Chinese competitors out of European markets, but the international bicycle trade is a hotly contested segment and companies trying to get a piece of the pie will go to great lengths. To do so shortly after the EU implemented punitive tariffs on bicycles from China, they began arriving from Cambodia, Malaysia, Indonesia and elsewhere, when it became clear that the bicycles were actually being manufactured by Chinese companies.
Punitive tariffs were then implemented against those countries. Tunisia began exporting them and soon had to pay tariffs. Today, bike components are still primarily made in China, but frames are finished elsewhere, such as Taiwan, because that's where the rules say value was added. Bicycles are no longer subject to punitive tariffs when imported into the EU, so what happens when the bicycle market is not protected by high import tariffs in the US city of Philadelphia? Bike shop owner Brian Catholic used to sell exclusively American brands that were produced domestically, but that changed over the years. There are still American brands, but all the bikes originate from the same place and it doesn't matter what the manufacturer is, whether it's Trek, whether it's Cannondale, whether it's specialized, all of their bikes, at some price or at some level, are made.
In China without protectionist policies like those in Europe, he says, Chinese bikes have flooded the market in the U.S. and that in turn has destroyed many jobs in the country, especially in his home state of Pennsylvania, where it once flourished. the bicycle manufacturing industry. He says it's not a good feeling to promote the liquidation of the domestic sector by selling cheap imports, but what option do I have to keep my family fed? You know, I own two different bike shops so I can offer my consumer a bike for under $400. that has gears to be able to offer a bicycle for less than $300 that is like a single speed ride around town it is good to be able to do that President Trump has threatened many sectors with punitive tariffs but not the bicycle industry in general .
Catholic is critical of protectionist measures, but would have made an exception for bicycles, it depends on the perspective from which you look at it, you know people who have lost their jobs because they have been transferred to China or Taiwan, they will probably have a very different view than that of someone who I have never been affected by it, but isn't free trade supposed to bring more prosperity for everyone? American problems in many areas of trade can be traced not only to China but also to Germany, the professor here says, but Dieter teaches his college students in free duce. - that being an exporting giant also has a dark side German products sell well internationally not only because they are of high quality but also because wages in the country have only increased moderately in recent years, while the euro has remained relatively stable weak Trump is angry about the trade imbalance and Dieter says he is right deutsche uber sure surpluses in Germany means deficits in other countries Germany expects the rest of the world to go into debt with Germany but also likes to criticize the rest of the world for being too indebted wants have your cake and eat it on these two.
Germany really benefits immensely from global trade. In 2017 it exported goods worth more than €1.2 trillion like China, making the EU a large net exporter. Germany has a huge trade surplus of 250 billion euros. The United States has a deficit of around 500 billion with many more goods and services coming in than going out. The ongoing debt has long-term consequences for the United States. One country's loss is another's gain. We head to the next area in the rivers of Iowa. Here Manfred Schmidt works for Schaeffler. A company that makes products that are often exported to the US earns a good salary and can afford to buy the things it wants, including many products available thanks to global free trade, just like most households around the world. world, Schmitz's house is full of things made in other countries is anything here in his living room actually made in Germany mainly very little if we got rid of everything that was not made in Germany there would be nothing left in Malaya with a exception, the old sewing machine that is proudly displayed what about the clothes we take a look at the family wardrobe they made in Turkey made in Bangladesh designed in Germany made in China even their pantry is full of food from all over the world the Schmidts have had personal experience of how quickly you can lose in the trading game freedom manfred schmidt almost lost his job when Schaeffler wanted to move his plant to a cheaper location abroad employees fight to keep the plant attracted national attention Schmidt and his colleagues They came to an agreement with the company he worked with for ten years, we worked five unpaid hours a week and then they came overnight and said we were closing the plant, which was a shock to all of us who worked there. because we all thought we would do five hours a week for free, so it's a nice sum. the company gets the dark side of globalization for free Manfred Schmidt was lucky to stay at the company but he had to move to another plant now everything is sweetness and light and they act like we are the winners because we make a lot of money in the industry, but that It is due to relocations and plant closures, we were lucky to get dedicated positions, but in another company they could let everyone go and those people will be the losers.
Schmidt family bicycles, all brands are German, but we know where they were made, at least the frames, a cheap production in China that cost hundreds of thousands of jobs, especially in the US. Back to Philadelphia, the The city is a dynamic, growing urban center, but in the surrounding region factories and jobs have disappeared as in many parts of the U.S. Sarah Parker and her neighbor Susan Schweickart do not consider themselves losers in the era of globalization and do not It's not like Donald Trump, but they have a mission. American Sarah has a popular website and American is her highlight on her US love list.
She gives thousands of fans tips on how to replace products made in other parts of the world. says it's about their jobs, you wouldn't believe how often American flags aren't even made in the United States, this is mostly in the United States, yeah, oh, yeah, oh well, I like it when they put the label Indian states on the front because people really care that this was made in a small town somewhere. I'm sure I don't know where, but by looking for a made in USA label, I'm supporting that small town and the people who made it, Parker says she herself experienced how jobs moved south of the border with Mexico and depopulated entire areas as factories died.
She decided to do something about it. My first job after college was selling Chevrolet. I came back a few years ago and that dealership justclosed the weeds that grew completely abandoned. It's sad to see it and the pride people feel when they build something and then can buy it. I think we have lost that it is often difficult to determine the origin of global products. That's the new norm. The two Americans say that should bother us. Plus, they don't need to tell you where things are made. I think it's just about food and cars, so we're lucky they give us so much information.
Parker admits that he made an exception when he bought a Volvo. The Swedish automaker is now owned by a Chinese multinational in its home. She says that she is trying to buy only American made products with sometimes limited success, so there are some things I'm not sure about, but I think I know that KitchenAid is assembled in Ohio. I read that the bowl is made in Korea. I know it's not like that, you can't buy toasters made in America. Her initiative appears to have a nationalist agenda. Parker says it all comes down to a matter of choice.
I think it's only nationalist if you are. By saying we're only going to buy American-made products, we make a lot of decisions as consumers, we choose things because they have recycled content or we choose things because they reflect a particular lifestyle that we want to choose something that's made in their country. My own community or our own country is just another consumer choice. I'm glad we have those options, so at least for me it's not a nationalistic effort. So what would happen if we all followed her advice and tried to only buy domestically made products? If borders were closed and protectionism reigned, it happened before, at the beginning of the 20th century, world trade and globalization really took off, but it soon ran into major obstacles: the US slid into the Great Depression, Germany faced its own enormous economic crisis and protectionism suddenly emerged.
Voices calling for isolationist policies grew louder during the 1930s. The United States began to take an increasingly aggressive protectionist stance, dramatically raising tariffs to protect American industries and jobs. Germany also put up barriers to international trade the mixture of protectionism and nationalism ended in the horrors of the Second World War its harshness in the midst there were disastrous developments in world trade in terms of volume fell by two thirds in four years by today's standards that is unimaginable if we saw a five percent drop in trade, people would call it a major crisis back then, it fell sharply and dramatically and that development goes back to the protectionist policies implemented by the United States of America that defined from the beginning the American solutions to prevent other major conflicts created the body that would eventually become the World Trade Organization based in Geneva.
Its fundamental principle that free trade brings prosperity to all has never really been accepted; On the contrary, the WTO has come under intense attack in recent years and the US led by Donald Trump is largely unaware that protectionism is destined to send the world into a new economic and political tailspin or our dire predictions only half the story in the city of Malacca in the German state of Baden württemberg the Styla group makes tiles the business is brisk the The construction industry is healthy, but the business faces stiff competition from China. The tiles there are unbeatably cheap, which is why the EU has imposed punitive tariffs.
Tiles imported from China now have a 26.3% import tax to protect jobs here from Asian competitors if they don't. There is no saying that Wilson bathrooms and kitchens in Germany will soon be clad in Chinese products. I think it is justified in the current climate because the competitive situation is unbalanced. We know that Chinese manufacturers are selling their excess capacity internationally at very low prices and that puts us in a situation where we can no longer be competitive, we cannot keep our people, we have to follow those rules, the punitive tariffs. on tiles are also a protectionist measure, but they keep people in their jobs in Germany and help drive better production and environmental protection. standards we are pretty and we produce here in Germany we are expected to comply with the laws that are relevant in Germany and we do so we exercise control over aspects such as environmental aspects, of course we don't have that for products that come from abroad, so there is the question of weight versus value because it really makes sense to transport these products such long distances without punitive tariffs.
European tile manufacturers would not last long under pressure from their Chinese counterparts if the EU had not instituted protectionist measures. The industry will soon disappear, and not only the tile industry across the bloc has imposed punitive tariffs on fifty-three types of imports from China, including steel, porcelain and even ironing boards. Anti-dumping measures have been accepted by the WTO. Protectionism is alive. well and apparently protects jobs, but although the EU has taken measures to protect its businesses, it does not welcome other countries trying to do the same. Cameroon, mom, Bali is on the way to her plantation, the road takes her through the jungle, she is the head of a village cooperative.
Located in the rainforests north of there the walk takes about an hour in each direction there is no street the members of the cooperative harvested more than two tons of onions here last year and sold the harvest at a market in the distant capital the profits They fed the entire town that we use onion as a remedy, for example, when you have digestive problems, we use it as an antiseptic and we make our sauces with onion. Cameroonians wouldn't know what to do without onions. Now the women of the village are planting cassava, not because they want to, but because it no longer makes sense to plant onions, onions imported from Europe have destroyed the market to protect farmers like these Cameroon would have to increase import duties even more but it cannot because a new free trade agreement with the EU called the EPA bans that onion.
The fields stretched from here to the river and there, but then we stopped being able to sell them all because of the large amount of imports, so we had to stop growing them. Onions are a staple food here, the African country consumes hundreds of thousands of tons a year until now they were all grown in the country, just as they do every day, the women of the cooperative prepare dinner, for now they still have their own onions that not only feed them and their families, but also help them survive 50 kilometers south in In a market in Yaoundé it is increasingly difficult to find locally grown onions every morning trucks full of onions arrive, Most of them imported from Holland, they are the ones that are wrapped in red nets, my friend Bali has dressed up for the trip to Yan.
One day to discuss the onion issue, he will meet with Yvonne Hawking, who runs an office that examines the effect free trade is having on everyday consumers. The two discovered that Dutch onions cost about 1/3 less than local varieties, but how can that be? when there is already a punitive 30% import tariff on this vegetable and as if cheap onions were not bad enough for farmers, other agricultural products such as garlic from China are also flooding the markets in this fruitful country and building our economies faster to think about opening our markets to the world European overproduction is undermining Africa's agricultural sector my ballet man doesn't know what to do next what happened with onions could just as easily happen with other agricultural products and new free trade agreements with the EU not allowing Cameroon to further increase punitive tariffs to protect the industry, it is time to understand that they must let African countries build their own markets, just as the EU took time to build their own markets, it is time to let us build our markets and then we can see association agreements with In other words, the EU is denying Africans what they need most: the right to institute measures to protect their still vulnerable agricultural sector.
All industrialized countries, including Germany, can only become economic heavyweights because they initially erected large barriers to foreign competition. but today that fact is conveniently forgotten without protectionism; In other words, Germany would never have become the industrial power that it later became in the 19th century, Iron Chancellor Otto von Bismarck closed the borders to prevent the entry of imports of wood and grain from Russia and Great Britain as well. He protected himself by creating the "Made in Germany" label at the time when it was intended to identify cheap, mass-produced knives, but the description later took on positive connotations.
She pretty much claims that foolish countries preach free trade principles when they themselves are especially competitive. and they preach it for sectors where there is especially competitiveness but in areas where they are less competitive they allow protectionism such as in agriculture in Europe, for example in Switzerland we have come to the canton of Sankt Gallen not long ago the Swiss decided in a referendum to support greater food security and quality in his country and this is one of the people behind the movement, the president of the Swiss Farmers Union, Marcus Ritter, owns a typical family farm in the area and firmly believes that free trade can be achieved unlimited. a dangerous thing bang-bang-bang eh, bring the handle if all trade were free if all borders were open then, for economic reasons, food production here in Switzerland would not make any sense, it would have to be relocated to places where the production is cheaper. where labor costs almost nothing, but it wouldn't be here in Switzerland.
Swiss salaries are on average 50% higher than even in rich neighbor Germany. The richest could never produce food here in Switzerland as cheaply as anywhere else in Europe, but it's more than price, it's also about having a domestic industry and saving jobs, which is why the country has imposed import tariffs on a variety of products. The amount of those tariffs makes a big difference here as to whether a company can operate profitably today where the tariffs are in place. very low, as is the case with milk, for example, makes things very difficult when they are higher, as is the case with products such as fruits and vegetables, in those markets they work very well, that is how the Swiss do it.
Strawberries are a good example of most. They are charged three Swiss francs in import duties per 100 kilograms per year, but during the harvest season in Switzerland that tax rises to five hundred and ten francs, which is basically equivalent to ban on strawberry imports, while onion importers usually pay just under three francs per hundred kilos. but while Swiss onions are harvested, they cost 126 francs and beef importers pay 109 francs in duties within a fixed limit, if you want to import more, although you will have to make an effort to pay 2,900 francs in duties for only 100 kilograms of meat, and what about the bicycles?
No matter where they are from, they cost only 12 francs each in tariffs. The president of the farmers' union likes the flexible system of import duties. Keeps major competitors out of the market when it matters most. Swiss farmers say it's not just about protecting their livelihoods, they insist. It is also about conservation and animal welfare. Only with protectionism do they say that these and other values ​​can be enforced. Livestock breeder Marcus Ritter does not believe that the principles of free trade are compatible with production standards. The Swiss would accept what is very important. is that here in Switzerland too I think we have the ethical responsibility to produce here the food we can and not simply try to use our purchasing power to get products on the world market as cheaply as possible, so the price plays a role, but the ethical responsibility It also plays an important role, of course.
The Swiss pay a high price for supporting domestic food production, but it is the only way to make the country's farmers competitive in a cheaper world, that is protectionism and the Germans do it too. Germany subsidizes every hectare of agricultural land in the country to the tune of 280 euros per year. In all European countries, around 60 billion euros are invested each year in agriculture, but this encourages the overproduction of milk and pork that are sold cheaply on the Chinese market. This is the other hidden side of European protectionism and the Americans do it too. The farmers thereThey also receive huge subsidies, while the giant agribusiness multinationals export products all over the world, the biggest losers in that equation are the small farmers in poor countries, which takes us back to Cameroon for years.
European companies were exporting poultry parts here that no one in Europe wanted and which destroyed the KOA agnus breeding business. Nobody bought Cameroonian chickens from him anymore, at least until the country decided to be more protectionist and banned imports of chicken parts. Since then, business has been improving little by little. The people of his village are slowly starting to raise birds for sale. The koa is a very well-known figure. In the area he is happy to show us his small farm. He hopes things will get a little better now. These chicken coops sat empty for years because European chicken, especially parts from Germany, were simply too cheap for her to compete, but now the import ban has ended.
I've given him a new start, everything is going well again. I love my business. I am so happy that you can make money again from raising chickens. A chicken market in Yaoundé. The birds offered here are domestic varieties that were in short supply while cheap European imports dominated sales. Francisco Mari, from the NGO Bread for the World, came on an inspection tour 15 years ago. He was one of the first to provoke a public outcry about how poultry waste in Europe was destroying livelihoods in Africa. He is happy to see that Cameroon banned the import of frozen products. poultry parts has restarted domestic production closing the border helped in this case, but Cameroon has to lift the ban because, according to an agreement signed with the EU, tariffs and non-tariff barriers must disappear, but Mari believes that if This critical juncture in its development is reached, Cameroon more than ever needs to protect its industries, of course, markets must be protected as long as their products cannot compete with ours, that is justified.
Many countries have only now begun to wrap their own production with these types of systems, why shouldn't Africa be? Mary knows all about the price of chicken and is also familiar with the desperate situation people face here and in other African countries the free trade agreements that the EU is imposing on them, she says are unilateral and obsolete, These countries are given no advantages that they did not already have, that is, access to markets and they had to open their own markets step by step to achieve this. Cameroon has little chance to protect itself. Other industries and businesses also need protection, says Maori because they are still in a critical phase.
Companies in Cameroon, for example, could start manufacturing powerful motorcycles. Today they all come from China. Free trade brings prosperity to some people but also widens the gap between rich and poor the richest 10% of humanity now owns 90% of the wealth On the planet, the poorest 50 percent of the world's population has to settle for almost nothing, just 0.2 percent of the wealth . The winners are those who can afford to invest in global companies. Google's parent company, Alphabet, has quintupled its value in recent years. Manzana. the value has multiplied by 10 during the same period the world economy has only grown by about a third but capital flows across borders wherever money can be made so the financial sector also benefits on a large scale from the free trade the problem is that there are no global rules for taxation that allow large companies to park billions in offshore tax havens like the Cayman Islands or Panama there are no global controls in the areas where they have the potential to make a difference for the most poor people of the world, that is why the protests are increasingly stronger, like this one at a WTO meeting in Buenos Aires.
They say the organization is little more than a cartel that exists to protect the interests of powerful industrialized nations and global concerns, people like Mom and Ballet have little chance in a world like that because without protectionism trade can never be fair, Food production in particular has to be protected from cheap competition, whether in developing or industrialized countries, if we want to continue producing food products in the region rather than in the cheapest place in the world and if the products They only follow the greatest purchasing power, so the only way to sustain it is with protectionism but rather positive protectionism based on sustainability.
Africa does not need chains, it needs protection while its industries grow and only when that happens will the avalanche of immigrants to Europe finally slow down. search for a better life Francisco Mari says the current model is fundamentally flawed. World trade rules are actually designed to allow big countries to invest in small ones and gain access to their resources. There is a lot of hypocrisy there, especially in agriculture. Everyone talks about how we need free trade, but they're busy heavily protecting themselves with subsidies to their own farmers, so it's a two-sided hoax that calls for international free trade while practicing domestic protectionism that doesn't work.
It is unfair and I think there is no future in it. The global exchange of goods is always a struggle for prosperity and in the end there are winners and losers. Truly free commerce is a myth and always will be.

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