Government interventions include tariffs import limits or bans on some goods. The idea behind free trade is to lower prices for goods and services by encouraging competition. There are many arguments for and against free trade. There are many advantages to free trade some examples are, that free trade increases price competitiveness. It can lower costs by letting companies use the cheapest resources availTABLE. It allows a company to increase its purchasing power, and typically it also usually allows countries to improve their economic growth. There is strong evidence that shows the trade boosts our economy.
Every country is bound to benefit by taking advantage of different areas of production. This allows partner countries to gain as a result of specialization. (The Pros and Cons of Free Trade Areas, 2014) There are also some disadvantages to free trade. Free trade assists in the facilitation of illicit goods more easily and has potential to increase security threats. Millions of middle-class wage jobs in the US alone have been outsourced to foreign countries. International markets are not a level playing field One example is a country with surplus products can dump them on the roll markets way below cost.
Lastly, increased domestic economic instability comes from international trade cycles, as the economies become dependent on global markets. This makes consumers, employees, and companies more vulnerTABLE to downturns in the economies of trading partners. These are just some of the examples of disadvantages. (Edge, 2010). After reviewing the information about advantages and disadvantages I have to say I believe the disadvantages for many individuals in the United States, as well as other countries outweigh the benefits.
I believe it has had an adverse effect on wages and has lead to less job availability. Many jobs that were previously in the US have been outsourced to other countries because labor costs are cheaper. Who hasn’t had to call a company and spoken to someone in another country? This is itself is unsettling, our jobs need to stay within the US not be outsourced to another country. The people in America need jobs more than ever. Believe prices have increased overall for products that are imported into our country. Large companies may be getting them cheaper, but that is not being passed on to the consumer.
One of the goals of free read was to reduce costs, so exactly who is benefiting from those cost reductions; clearly it is not the consumer. This seems to be the same familiar theme; the rich get richer, middle class America gets poorer, and the poor get poorer. The effect on less developed countries is even worse. Many of the free trade agreements will only exacerbate poverty in some of these countries, by creating hardships on country farmers, making it difficult to get affordTABLE medicines and much more. The poorest people in developing countries often bear the brunt of the Free Trade Agreement’s.
These agreements show the absence of political will to transform trade into a tool to fight poverty (Sofas. 2007) In conclusion, I would agree that concentrated wealth still rules in developing countries that are adversely affected by free trade. Many are viewed as cheap short-term investments. Free trade in developed countries will have greater levels of short-term capital thus weakening a productive economy of a country. There is also the threat that a developing country could be seen as a hub for cheap labor and raw materials. I believe that free trade between many developing countries can be beneficial.
In order to make this mutually beneficial to all, it has to be framed in the right context to protect the county that could potentially be taken advantage of and left with more problems that they started with. We can look around in the United States and see how it has affected each one of us directly. Costs of good and services have increased and many of our jobs have been outsourced. Free trade could potentially be a win, win benefit for everyone with more through put into how it will affect the countries citizens as a whole, rather than just how it will benefit big business.