Free Trade Vs. Protectionism

Some Major benefits of international trade include the reduction of poverty, expansion of business opportunities for local companies and reduces costs for consumer.

Economist have been debating between free trade and protectionism for decades. This debate has been most recently reiterated through President Donald Trump’s announcement that his administration would be taking steps to limit free trade in the United States. The opinion piece “Beware the Trump Trade Trap” by Liz Mair, argues that free trade is positively linked to a country’s prosperity, although most of the population may disagree with this. Mair argues that protectionism would limit consumption, however, it is important to also expand upon these ideas and to remember that free trade encourages prosperity, comparative advantage, and improves economic growth.

Free trade provides opportunity, it provides growth, and it provides struggling nations a chance. With free trade, markets open across national borders and the consumer ultimately benefits from higher quality goods at fair market prices. The producers of such goods now have larger markets to sell to allowing for the opportunity at increased sales, giving the consumer a greater variety of goods that can more individually meet specific demands. Free trade implementation to the United States foreign policy is a developing and revolutionary mindset that will bring prosperity to all parties involved. The United States will benefit from free trade because the market to purchase U.S. made goods and services will increase dramatically

a number of gains to be obtained from international trade, such as lower prices, greater choice,

While free trade could potentially mean a lot of benefits, its superiority over protectionism is strictly theoretical, under the conditions that you disregard all the unique conditions of each country involved, and the possibility of exploitation of workers, resources and legal loopholes by large corporations. Realistically industries will be monopolized by whichever country that does it cheapest, thus making any competition in that industry from the other countries extremely unprofitable and unsustainable. Each country would only be able to focus on sectors that they have a comparative advantage in, while the other industries would stagnate, laying off masses of workers, causing high unemployment rates in the country. Furthermore, businesses are focused on their own profit so they’ll go for labour wherever it’s cheapest, which increases income disparity. Theoretically, free trade can bring about the largest amount of trade and aggregate wealth for everyone by making each country specialize in what it has an advantage in, to produce more for less, lowering the market prices to be more affordable, greatly boosting trade, and raising quality of life. Essentially free trade aims to maximize income for each country under the contemporary conditions. However even if everything miraculously goes as planned and that hypothetical situation is reached, even under these perfect conditions free trade will allow no further development of industry.

Free Trade is the ability to trade goods and services without barriers, and for prices to rise naturally through supply and demand. In theory, Free Trade was a way to break down the barriers between countries, banishing taxes and allowing prices to be naturally set through supply and demand. According to the World Trade Organization, this gives the poor countries the opportunity to specialize in the production of goods that derive from their environment and natural resources with the capacity to sell those same goods to the western world, while being able to buy back goods that may not produced in their native country. This idea is to be beneficial to all; however, the rich become richer while the poor remain poor.

Free trade which is also known as laissez-faire has been around since the Nineteenth century. Free trade is a built constructive thing which allows trade to be easily transportable between nations and states. Due to this there has been many unfair calls but also beneficial to some. Also it brings about tension as everyone would like to input an agreement based on what suits them. This evaluation is divided into four main sections. It will first consider what free trade is and how is operates in order for the reader to understand the actual concept of free trade. It will then go on to describe the arguments for and against free trade. The third part compares the two arguments and comes up with an evaluation on the two. Finally, some conclusions will be drawn as to which evaluation has a stronger point.

Free trade areas, FTA, are economic integration arrangements in which barriers to trade (e.g. tariffs), exchange of goods and information among member nations are removed. It is arguable to say that fair trade aims to create equilibrium between LEDC's, less economically developed countries and developed nations in terms of trading activities and ethics. In saying this, free trading between more economically developed countries and LEDC's will mean

Sometimes goods might be sold overseas at prices that are below their production cost and below market price in the domestic market. Cassimatis (2007) argues that, through international price discrimination, import competing industries might be forced to exit the market. Ideally, it is costly to re-establish industries after they have been forced to close down. Although not common in modern times, governments might be justified to effectively set prices of goods that are not domestically produced (imported goods) (Cassimatis 2007). These measures would prevent dumping: the process of exporting goods by a country to another country

Free trade is something that WTO encourages globally and insists that no government interference should take place in international trade and that this will be followed by specialisation and an increase in countries welfare. Countries however want a competitive advantage and to obtain this interference takes place in the form of restrictions. Most highly competitive countries are well-off economically, has respectable infrastructure, high levels of education and technology, steady political and social status and strong international positioning. Restrictions are set in motion for several reasons, all of them follow.

What is meant by free trade, exactly? First, it is important to note that while the terms “free trade” and “fair trade” are often used interchangeably in colloquial speech, they are completely different things. In fact, free trade is anything but fair (except to private corporate profits). Free trade, according to mainstream economic policy, has zero restrictions on imports and exports. There are no tariffs, quotas, subsidies, etc. Often, free trade agreements surpass the sovereignty of nations in order to guarantee the corporate interest in private capital gains. Michael Palenti, in his article, “Globalization and Democracy: Some Basics”, vocalizes this concern with free trade agreements, saying that, “…[corporations] seek a

The model of a country’s trade regulations, rules, and openness to trade can generally be classified under two ordeals, which are protectionism and free trade. A country that chooses to have a closed barrier of entry for imports and generally refuses to take part in the world trading system is said to be practicing protectionism, which is when a country doesn’t open their economy for the world (Hill, 2015). On the other hand, a country that welcomes foreign firms and more open trade is side to be free trading and openly participates in the world trading system and the growing notions of the globalism. Both these economic trade philosophies are seen in countries around the globe, and each has their set of

There is no unique definition for free trade. In theoretical terms, it articulates the non-existence of artificial impediments pertaining the exchange of goods across national markets. Plus, the similar prices met by domestic and international producers and consumers regarding transportation and other transaction costs (Irwin). Conversely, in practical terminology, free trade is the nation-state policy towards international commerce; promoting the absence of barriers and eradicating the restrictions imposed on the importing and exporting of goods between countries and

”Free trade policies have created a level of competition in today's open market that engenders continual innovation and leads to better products, better-paying jobs, new markets, and increased savings and investment” (Denise Froning). Though Free trade plays a huge role in the economy today because of what and where it is used. Free trade allows for traders to trade across national boundaries and other countries without government interference. Meaning that traders have very few regulations that allow for them to do this without the government intervening. Free trade makes things for traders much easier and also allows for many more jobs in the US, such as exporting jobs, or jobs in the auto industry and plants. Though there are many

In order for free trade to work smoothly among nations, trade agreements are created to