Wednesday, July 28, 2010

No such thing as a free market. The notion that market "forces" dictate things certainly isn't free!

By Dr Mahathir Mohamad

1. A long time ago when I was Prime Minister I met President Bush the father, at Boston University where he was conferring degrees for graduates. I met him in a side room and I told him of the unfair anti-palm oil campaign by America, blaming it for heart diseases.

2. We later submitted palm oil samples for three American chemical laboratories to examine the cholesterol contents. Their findings proved that although palm oil had more cholesterol than rival soya bean oil, the main edible oil in America, cooking reduced palm oil cholesterol but increased the cholesterol in soya bean oil.

3. The campaign against palm oil stopped but Americans still refused to use palm oil for cooking to this day. It was a case of non-tariff barrier. But that is the way America deals with competitions.

4. When the Vietnamese exported catfish to America, American catfish producers got their Government to declare that Vietnamese catfish is not catfish. The catfish farmers in Vietnam lost their business.

5. Malaysia-made rubber gloves were banned in the United States because out of the hundreds of millions used, one person had allergic reaction.

6. Foreign aircraft manufacturers wishing to export to the United States have to use American components and do part of the finishing in America. It is the same with the automobile. The Japanese and the Koreans have to put up plants in the United States and employ American workers in order to remain in the United States market.

7. Despite all these conditions Toyota's share of the world auto market grew. Then news came that Toyota was on the verge of becoming the No 1 automotive manufacturer in the world, displacing General Motors of the United States.

8. American's pride was hurt. Soon something was found to fail in the hybrid Toyota "Prius". Apparently one American user from tens of thousands was hurt because the brakes failed.

9. The news about the Prius failure hit the headlines in the American controlled world media. Toyota was forced to recall tens of thousands of the Prius model. The losses were enormous.

10. In order to put Toyota in its proper place the head of Toyota Corporation was summoned to Washington to face a congressional enquiry.

11. Toyota's position as a possible biggest automobile manufacturer in the world has been eroded. But while American auto manufacturers have to be put under Chapter II, i.e. as bankrupts, Toyota is still showing profits. In time Toyota will become the biggest automobile company in the world, the faults with the Prius notwithstanding.

12. There really is no free market. If tariff and other barriers fail to stop imports, the application of sanctions against countries, whatever may be the reason is also another form of non-tariff barrier. Free trade simply does not exist.

13. Truly hypocrisy prevails in the markets and in international trade. The greatest hypocrites are the very people who conceive and promote the idea of tariff free world trade.

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