You are on page 1of 2

Free trade is the total absence of government policies restricting the import and

export of goods and services. It helps businesses grow enormously but it is against full
trade protectionism. I wouldn't call myself an opponent or a backer of free trade because
actually free trade can be beneficial, but it must be approached by looking at the long-
term consequences. 

The big argument in favor of free trade is its ability to improve economic efficiency.
Even when taxes, tariffs, and other restrictions on trade are highly regulated instead of
being fully eliminated, there is an economic benefit to all parties involved. According to
NAFTA (North American Free Trade Agreement), the US Trade Representative Office
estimates that economic growth has been 0.5% higher annually than it would be if the
free trade agreement was not active. 

Besides, when protections put into trade agreements to protect local businesses are
removed, the result tends to favor the consumer because more competition from global
entities can occur at the local level. This reduces stagnation within markets, though at the
risk of eliminating smaller businesses from the equation. Lower taxation and fewer
barriers to entry can also reduce pricing for customers. 

Moreover, free trade encourages countries to rely on each other for goods and
services, making them reliant on their trading partners. Some economists have argued this
interdependence makes wars much less likely, since neither side would want to risk
losing access to the others' markets.

Free trade makes a nation's overall economy more productive, but it also can harm
humans, workers, and the environment of this nation. Firstly, it encourages businesses to
move to countries with poor environmental and labor regulations. These moves lead to
systematic labor abuses and destruction of the environment. For example, a coal mining
company in the United States might have to pay workers a high minimum wage, adopt
aggressive safety policies and protect local rivers from pollution. Free trade agreements
might allow the mining company to move operations to a country without any of those
rules, allowing it to cut costs by imperiling workers and the environment. 

Secondly, free trade isn't fair. The fact that trade barriers might create opportunities
for corruption, but so do free trade agreements. Economists may envision a society where
trade barriers vanish entirely, but free trade agreements are negotiated and signed by
politicians with their own interests to worry about. As a result, the agreements usually are
immense documents full of loopholes and rules that create big advantages for big
established businesses. 

In conclusion, the goal of business is to realize a higher profit, while the goal of the
government is to protect its people. Neither unrestricted free trade nor total protectionism
will accomplish both. A mixture of the two, as implemented by multinational free trade
agreements, has evolved as the best solution.

You might also like