Discussion Assignment Unit 6

Free trade is beneficial to the world economy since there is no country that can be self-sufficient.
Countries are in different geographical areas and natural resources are found in different areas.
Therefore, free trade facilitates the movements of goods and services from one country to
another. In this regard I support free trade, as it brings different countries worldwide together as
one nation for the purpose of trading.

Free trade provides access to a variety of high quality goods and services – in a free trade
economy imports are intending to be cheaper especially those from the low income countries like
china, where prices are reduced by more than 2 percent for every 1 percent share in the market
that gives more income for other countries to spend on other products. In this way free trade
improves the world economy (Rittenberg and Tregarthen, 2012). 

Free trade supports economic growth – since different countries are able to import and export
different goods and services worldwide it would be cheaper to more goods and services since
raw materials can be easily accessed from one country to anther other. This initiative would help
reduce unemployment in different countries by creating more job opportunities. The industries
would operate at the maximum capacity that may absorb raw materials from several sources of
supply and offer more jobs. For instance, a multi-national company can move vehicle spare parts
to other countries. This explains that a multi-national can provide goods and services at the same
time it can offer employment to people in the country of operations in order to contribute to the
global economic growth (Rittenberg and Tregarthen, 2012). 

Free trade encourages competition – This is a best way to do away with monopoly trade that
can limit people to one source of supply which might be not their choice in terms of pricing and
quality. For example, 80% of technological products are supplied by China to African countries
while 20%, is coming from other parts of World, because China is offering its product at the
competitive prices. Free trade provides competition among the suppliers, hence they offer good
quality of goods at affordable prices. Free trade opens the doors for world business to enable
firms and individuals meet in the global single market for the purpose of trading (Rittenberg and
Tregarthen, 2012). 
 To promote trade fairness – when there is a set of rules to regulate a particular trading
activities everyone would be on the advantageous side. The rule based system does not
encourage slavery, or exploitation attitude among the dealers. That’s why free trade provides
equal opportunities to all the nations globally. Without such a system only big and well
connected industries can utilize good opportunity, for this reason free trade is the solution to
address trade challenges (Boudreaux and Ghei , 2018).

Foreign direct investment – freed trade can open countries for foreign investment
opportunities. Most of the countries without trade barriers have enjoyed foreign investment that
has helped them to improve their standard of living and grow the economy. For instance, looking
way back as far as 1994 up to 2019 there have been policies concerning free trade that allowed
$25.6 billion in foreign investment in order to support the American economy. There is another
record for $55.83 billion which was invested in foreign countries in the first three months of
2018. Considering this example, free trade has facilitated American to invest in other countries in
order to support its economic growth (Boudreaux and Ghei , 2018).

Finally, free trade has brought about different goods and services being distributed everywhere in
the world. In the long run almost every nation has benefited from free trade through economic
growth. I support free trade as it used as a tool to maintain political and economic stability
among the nations. Free trade removes trade barriers or trade wars that can cause conflicts in the
business world. Therefore, free trade creates a friendly atmosphere in the trading environment.

Reference

Rittenberg, L. and Tregarthen, T. (2012). Macroeconomics Principles V. 2.0.

Boudreaux D. J. and Ghei N. (2018, 23 May). The Benefits of Free Trade: Addressing Key
Myths.
https://www.mercatus.org/scholars/donald-j-boudreaux