Free Trade Agreement Should Not Be Signed By Poorer Countries

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Free trade agreement is a treaty between two or more countries to establish a free trade area where commerce in goods and services can be conducted across their common borders, without tariffs in any form of government tax or hindrances but (in contrast to a common market) capital or labor may not move freely. Member countries usually impose a uniform tariff (called common external tariff) on trade with non-member countries. This agreement is should not be signed by the poorer countries because: 1. With the removal of trade barriers, structural unemployment may occur in the short term because the poor countires have little to export and also they often have too many people with limited work opportunities. 2. International markets are not a level playing field as countries with surplus products may dump them on world markets at below cost. 3. because there is no short-term protection policies by governments, poor countries may find it difficult to become established in a competitive environment. With the above mentioned reasons, my stance on free trade agreement for the poor countries is that, poorer countries should abandon free trade agreements because free trade is the process of liberalization of market from governments interventions. With this agreement, all economic resources from the countries involved are subjected to price as a reflection of supply and demand, which in turn makes price as the main determinant for resource allocations. Also, free trade creates an
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