Argumentative Essay On Free Trade

724 Words3 Pages
Ronald Reagan, in his 1983 State of the Union address, stated that “America must be an unrelenting advocate of free trade.” While the United States’ free trade stance led it to prosper in the decades before and after Reagan’s presidency, recent protectionist rhetoric and actions by the current president, Donald Trump, have put this value to the test. Trump has pulled out of the Trans-Pacific Partnership (TPP), and has stated that the North American Free Trade Act (NAFTA) is “the worst trade deal maybe ever signed anywhere, but certainly ever signed in [the United States].” Although Trump claims that these trade deals would hurt the American worker, he does not fully understand the economics behind free trade; less restrictions on trade will almost always benefit all participants. The reason that free trade improves the economies of all participants is due to the concept of comparative advantage. According to, “A person has a comparative advantage at producing something if he can produce it at lower cost than anyone else.” Crucially, the word “cost” here means opportunity cost, defined by Investopedia as “the benefit one forfeits by choosing an alternative option.” In other words, the person has a comparative advantage if he gives up the least to produce the good. This means that one person can be better at producing everything than another, but it would still be advantageous for both parties to trade. If both produce the product that provides them comparative
Open Document