Everyone Is Better off with Free Trade
Everyone is better off with free trade.
I agree with this statement as free trade will be able to bring much more benefits to the world.
Free trade advocates specialisation. With specialisation, each country will be able to specialise in producing and trading goods which they have a comparative advantage over. Countries will be able to gain from these as free trade enables a country to produce a higher quantity of exports, bringing in economic growth and also increasing job opportunities. An example would be U.S. after signing the North American Free Trade Agreement (NAFTA) in 1993 and the World Trade Organisation (WTO) in 1995. The U.S. economy have grown more the 23 percent and the total employment increased by 2 million between 1998 and 1999 after signing the agreements. Furthermore, with specialisation, it will also help the world output and consumption grow beyond the production possibility frontier.
Free trade can also give us better access to the markets. It gives greater choices for consumers to choose from as consumers will have a variety of goods and services from different producers around the world. Countries with lesser economic resources can also obtain the resources needed to consumer goods and services much more easily with free trade.
Therefore, I agree that everyone is better off with free trade, since we will be able to benefit through economic growths and a greater access to the market.
References:
The Benefits of Free Trade: A Guide For Policymakers. (2000). Heritage.org.
Retrieved from http://www.heritage.org/research/reports/2000/08/the-benefits-of-free-trade-a-guide-for-policymakers
Free Trade: Benefits of free trade. (n.d.). Retrieved from
http://www.dineshbakshi.com/igcse-gcse-economics/international-aspects/revision-notes/2143-free-trade-benefits-of-free-trade
Everyone is better off with free trade.
I disagree with the statement that everyone is better off with free trade as there are still some countries and industries that might lose out.
Firstly, as free trade advocates specialisation, countries will specialise in the goods and services which they have a comparative advantage over. However, this can put the industries in a country producing goods and services without a comparative advantage over another country at a disadvantageous position. These industries may experience a decline in the global demand for their goods and services because of the lack of comparative advantage. When these industries are experiencing a decline in demand, there will not be a need to have as much workers in the industry. This in turn will lead to retrenchment of the workers and cause the unemployment rate to increase for the country. The retrenched workers will also require re-training to be able to find jobs in other industries.