Every shopper knows the story: tinned pineapples from Thailand, tomatoes from Italy, fresh flowers from South America, dairy from New Zealand.
We know that free trade theory has captured the heartland of policy when the intermediaries between farmers and consumers, such as abattoirs and grain marketing agents, are sold into the ownership of Australia's competitors.
Australia's commitment to free trade and free foreign investment began in 1983 under Paul Keating's treasurership and was boosted when the National Farmers' Federation made common cause with the mining industry in advocating removal of tariffs on imports of machinery, intended to reduce costs to farmers.
All very well, but the cost of buying tractors is only one piece of the complex jigsaw that makes up a modern economy.
Free trade policies force Australian producers of export commodities to accept international prices, set by the cheapest competitor.
They allow corporations to cheat on taxes. They have laid waste to Australian manufacturing. They undermine new industries like call centres.
The justification most economists cite for free trade is Ricardo's 1817 theory of 'comparative advantage'. This is based on differences in the opportunity cost of capital in different countries.
But the theory assumes that there is no transfer of capital across borders. Nowadays, financial capital crosses international borders in milliseconds.
To scientists, if the basic assumption underpinning a theory is invalid, the theory is invalid. The entire theoretical foundation for opening Australia's borders to unmanaged market forces is quicksand.
Free trade doesn't even pass the test of common sense. Trade flows based on the greater 'efficiency' of foreign producers make no sense when on the two sides of the exchange, there are differences in the value of currencies, labour costs, taxation regimes and standard of living.
International markets don't care about the costs that producers incur in bringing produce to market, only the prices they can be forced to accept.
Producers can run down their natural capital because in the short-term this does not appear in their cost ledger.
It gets worse. Governments are then pressured to subsidise farming with drought aid, farm biz, cheap loans and other instruments with heavy overheads; and when that isn't enough, call on charities to support distressed families.
Further, supply chains of agricultural products based upon shipping or flying food across the oceans burn petroleum fuels that can be burnt only once before their energy is effectively lost forever for useful work.
Free-trade policies focus on reducing prices for consumers and are careless of the fate of producers.
I call on economists to craft a new theory and practice of trade that respects the interdependence of consumers and producers and the ultimate dependence of both on healthy natural capital.
- Dr Geoff Edwards, vice president, Royal Society of Queensland
These are his personal views.
