Are there reasons to believe that free trade will mean the unskilled
labour in industrialised countries will earn the same wages as in
poorer countries? Does this mean that the free trade Is a bad policy?

Think about it another way, if you lived in the USA and got Indian
unskilled labour wages - would you be able to eat ?

If you could not eat, how long would it be until you dropped out of
the labour force ?

Free Trade exports jobs, it can certainly reduce wages and employment,
but low wage countries also have a low cost of living which means that
the 'real' value of wages may be similar although the monetary value
is different.

Real values may converge, but it is unlikely that monetary values will be the same.

The wages will (and have) move to a more middle ground... but there
are many things to consider including:
-The real wage will also depend on transportation costs to the market
(typically the US) ...  labor cost in India + transportation cost to
US = labor cost in US.  Many goods have very high transportation
costs.
-To have educated workers, there are a certain number of uneducated
workers required in the same location (ie janators, lawn care,
cafeteria workers...).  These on location jobs cannot be exported.
-Cheaper labor in other countries making the products that are sold in
the US means that US citizens get more cheaply made products.  This
means that $5 in the US buys more goods than it would have if the
products were made in the US... which means everyone (even unskilled
workers) in the US is effectively richer.
-The global economy leads to much quicker advances in technology which
in the long run makes everyone richer.

Sure the US will not be the only dominant world market for long, but
the benefits of a global economy will outweigh the costs (strictly
economically speaking).

Thanks lot for your answer? However, I do understand the basics of
this question. Maybe, someone will be able to provide more
comprehensive discussion about this topic?

http://www.imf.org/external/np/exr/ib/2000/041200.htm#VII

I would say that Free Trade is a bad policy, however, I may have a
bias opinion because I am canadian, and we are getting the raw end of
the deal from our free trade agreement with America.  I dont think
that there is any reason to think that free trade will ever cause
unskilled wages in the US to drop to the price that wages are in 3rd
world countries where the unskilled jobs ar being deported to.  For
example in Jakarta (about 1997) unskilled laborers were being paid
about the equivalent of $2 american per day to make name brand
clothing that will be sold in the US for many times that.  Another
responce to this question sais that they import "cheap" items, making
everyone essentially richer... this is not always the case.  I am sure
that you have been to clothing stores lately... Did you feel rich?

Even if, by some ingenious scheme by big buisness, wages were driven
low enough to compete with 3rd world labor, or if somehow,
industurialists all grew a concious at the same time and brought 3rd
world labor up to a livable wage, what would happen is the US
manufacturers would simply stop shipping overseas.  If labor +
shipping + materials was not significantly less that making it in the
US, they wouldnt bother shipping it.

So. the answer to your question is NO.  There is no reason to think
that unskilled labour in industrialised countries will earn the same
wages as in
poorer countries.  And YES, free trade is a bad policy!

Julie,
1) I'm curious to know how Canada is suffering from its free trade
with the US.  I don't dispute it because I really know nothing about
it, but I am curious.
2) Clothing can be found very cheap if you don't shop at expensive
stores.  Of course if you go to name brand places then you'll easily
shell out $30 for a shirt.  But I'll ask this... What percentage of
the average wage did people pay for cheap clothing in 1960?  What
percent of the average wage do people pay today for cheap ($6 WalMart
shirt, $10 jeans) clothing today?  I guarantee clothes can be had much
cheaper today.

People can spend whatever they want for goods, it just so happens that
people tend to buy expensive goods most of the time ($30,000 cars
today that get 18 mpg are the norm, but a $12,000 car that gets 35+
mpg can easily be found, $10-$15 clothes are out there yet people tend
to pay $30-$40, a good meal can be bought at a restaurant for $6-$8
yet most people spend $15-$20...).  I'll agree that what people choose
to pay today is probably more than what they chose 40 years ago, but
there are more and better choices available today.