To know if anti-free trade is the best step to deriving a more stable economy, you need to read to see the different arguments in favour and against the free-trade economy.
While economists argue that free trade enables the consumers of goods and services to enjoy the dividends of imports that are at a considerable rate, others may have their own opinions.
But, we just cannot key into that without making our findings.
Table of contents
What Is Free Trade?
Also referred to as a laissez-faire policy, it is a policy where the government of the day neither comes in-between the importation system nor segregate with issues relating to exports by imposing tariffs or subsidies.
How does Free Trade Work?
The absence of trade barriers is a free trade policy. Therefore, to promote free trade, the government doesn’t need to neglect all forms of import and export system just to be anti-free trade.
Basically, anti-free trade doesn’t take an all-round restriction as it must allow a specific product to remain tariff free.
Pros and Cons of Free Trade
Pros
It Causes an Increase in a Nation’s Economic Growth
Free trade makes room for the creation of much bigger markets where companies can sell their goods. This literally means that countries who practise the free trade policy resort to producing the stuffs themselves.
This way, productivity is at a doubled rate as well as the growth of the nation’s economy.
Creation of more Employment Opportunities
Free trade attracts a foreign investment and this investment when handled properly materialises into something very meaningful for the residents of a particular country.
Research shows that there has been a 1.5% growth in employment for countries that practice this free trade policy.
Read: What is Traditional Economy: How it Works | Pros & Cons
Global Competition in the Local Market
Free trade makes it difficult for foreign suppliers to impose their new price on the local market.
This is so because the tax they pay rises above normal. Also, when these barriers are relaxed, they can sell their goods to consumers bringing about a price drop in the market.
Cons
Job Outsourcing
Free trade makes production companies to move their businesses to places where they can pay cheaper rates for their production.
People lose their means of livelihood and companies no longer meet up to compete with their global counterparts.
Sub-standard Working Conditions
When these jobs are outsourced to a sub-standard environment, it makes workers over there to work beyond their normal work hours and under very unfavorable conditions.
Also, workers get very meager pay for their hard work.
It is Generally Bad
Free Trade requires under-developed countries to opt for resources that are dangerous to the environment in producing some goods.
However, it also means that goods may have to travel the usual distance thrice before they get to the final consumers.
Final Thoughts
Anti-free trade is usually not the best option when seeking for ways to stabilize a nation’s economy.
This is because free trade makes room for importation and exportation of goods and services without barriers while being grounded in their area of specification.
References
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