Trade is the exchange of goods and services between people, companies, countries, and other

entities according to Market Business News (2019). This is done among countries as they need
to gain access to things they either do not have or cannot produce enough of. However, there
can either be barriers to trade or free trade where in this sense is considered as “elimination of
trade barriers”. Free trade according to Market Business News (2019) is a policy that some
international markets and governments follow in which there are no restrictions on import from
or export to other countries or economic blocs. In other words, nations are more opened to a
free flow of goods, services, labor, and capital across borders, not being restricted to what they
can import or export, increasing the overall economic welfare of their country and opportunities
for foreign direct investments.

Therefore, having an understanding of what free trade is all about brings me to believe that this
elimination of trade barriers affect the European Union output in such a way where they can
supply a great number of countries since having no barriers allows them to have access to more
markets throughout the world. It also causes the economy of the European Union to indulge in
economic growth since they can freely move products across their borders where each nation
gets to take advantage of the manufacturing, commercial and industrial strengths of every other
economy in agreement according to Miller (2019). The European Union has less to worry about
due to having lower cost burdens as transaction prices are lower where consumers also benefit
from this due to the removal of tariffs.

The European Union is given the opportunity to partner with other countries that aid in
improving the standard of living due to new partnerships, investments, and opportunities
available to the European Union. Capital is increased which helps in the advancement of local
industries and domestic businesses since the demand for certain goods and services are
increased. This, however, can generate jobs for locals to help meet these demands and provide
higher-skilled workers since that investor provides training. However, more skilled persons have
the privilege to travel to other countries that meet their status preference and their interest,
causing the European Union to lose skilled workers due to having no barriers in place.

Free trade also encourages competition where since there are no laws to protect products, the
ideas of one country can be stolen by another where there will be trade available for the same
goods and services at different prices regardless of their quality. This can create challenges
among firms causing them to cut back on costs, preventing the seller from charging high prices
because they want their product to be sold. Free trade can also encourage the degradation of
natural resources for instance; in certain parts of Europe fish is exported. With free trade, the
demand for the export of fish to other countries can reduce the amount of fish that is available
to locals as well as cause over-fishing depleting the supply of fish within the European countries
and cause a threat to biodiversity and the country’s economy if this was an important source of
income.

References
Market Business News. (2019, September 21). What is trade? Definition and examples of trade.
Retrieved from https://marketbusinessnews.com/financial-glossary/trade-definition-meaning/

Miller, K. (2019, August 19). 19 Advantages and Disadvantages of Free Trade. Retrieved
from https://futureofworking.com/6-advantages-and-disadvantages-of-free-trade/