Free trade can harm developing countries from "summary" of 23 Things They Don't Tell You About Capitalism by Ha-Joon Chang
One of the most commonly held beliefs in the world of economics is that free trade is always beneficial for all countries involved. It is often assumed that by removing barriers to trade, countries can specialize in what they are best at producing and everyone will benefit from increased efficiency and lower prices. However, this assumption overlooks the fact that not all countries start from the same position of strength. Developing countries, in particular, often face significant challenges in competing in the global marketplace. They may lack the infrastructure, technology, and skilled labor necessary to compete effectively with more advanced economies. As a result, when they open up their markets to free trade, they may find themselves overwhelmed by competition from more developed countries that have significant advantages in terms of economies of scale and technological expertise. This can have devastating effects on local industries in developing countries, which may be wiped out by competition from more efficient producers in the global marketplace. This can lead to unemployment, poverty, and social unrest as workers in these industries lose their livelihoods and struggle to find new opportunities in a rapidly changing economy. Furthermore, free trade can also lead to a situation where developing countries become overly dependent on a narrow range of exports, leaving them vulnerable to fluctuations in global prices and demand. This can expose them to significant risks, as they may find themselves at the mercy of external forces beyond their control. In this way, the concept of free trade as a one-size-fits-all solution to economic development overlooks the unique challenges faced by developing countries. While free trade may benefit some countries in some circumstances, it is important to recognize that it is not a panacea and can have harmful consequences if not implemented carefully and with a full understanding of the specific context in which it is being applied. Developing countries must be given the support and flexibility they need to build competitive industries and protect their vulnerable populations from the negative effects of unrestricted global trade.
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