Free Trade And International Trade

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Analytical Essay 1 Free trade occurs when there are no artificial blockades put in place by governments to restrict the flow of goods and services between trading countries. When trade barriers, such as tariffs and subsidies are put in place, they protect domestic producers from international competition and redirect, rather than create trade flows. This results in less productivity and competition. Free Trade promotes international trade, multilateralism, the development of lesser-developed nations and increases the standard of living. American opulence rests on the framework of global trade. Free trade guidelines have created a level of contest in today 's open market that produces persistent innovation and leads to better commodities,…show more content…
Many policymakers today acknowledge the benefits of free trade than when Congress passed the Tariff Act of 1930 (the Smoot-Hawley Act). The destruction created by these protectionist tariffs led succeeding U.S. administrations to support free trade after World War II. Americans today do not sew their own clothes, grow their own food, build their own houses, or buy only products made in their own states. It would simply cost too much, since Americans can acquire such items on the open market with comparative comfort and usually for cheaper prices. It makes economic sense to buy a product from another who specializes in such production or who can make it more easily or for less cost. This does mean that your local producers will have to compete with international competition and job protection is not granted. Free trade encourages competition, spurring companies to innovate and develop better products and to bring more of their goods and services to market, keeping prices low and quality high in order to retain or increase their market share. Since companies must compete with their overseas counterparts, American firms can take note of all the successes as well as the failures that take place in the global marketplace. Free trade also spurs innovation. The U.S. market has demonstrated repeatedly, particularly over the last decade, that competition leads to increasing innovation. This is unmistakable, for example, in the intense competition to create the latest
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