M-S 2:30PM-4:00PM

My Position in the Effect Global Free Trade

(GE 21)

“ The global free trade has done more harm than good”

From this notion, there are more negative effects of global free trade than positive ones. As in my
perspective, there are numerous benefits than negative effects of it. In regards to Dan kildee-
“ The establishment of free trade agreements can be a critical and progressive steps towards
economic integration, and continues to become more valuable in an increasingly global world.

Global Free trade means that countries can import and export goods without any tariff barriers or other
non-tariff barriers to trade. Essentially, free trade enables lower prices for consumers, increased exports,
benefits from economies of scale and a greater choice of goods; Free trade agreements don't just reduce
and eliminate tariffs, they also help address behind-the-border barriers that would otherwise impede the
flow of goods and services; encourage investment; and improve the rules affecting such issues as
intellectual property, e-commerce and government procurement; Free trade has allowed many countries to
attain rapid economic growth. By focusing on exports and resources where they have a strong
comparative advantage, many countries have been able to attract foreign investment capital and provide
relatively high-paying jobs for local workers.

Free trade can be defined as a situation where governments impose no artificial barriers to trade that
restrict the free exchange of goods and services between countries with the aim of shielding domestic
producers from foreign competitors. The argument for free trade is based on the economic concept of
comparative advantage. The principle of comparative advantage states that even if one country can
produce all goods more efficiently than another country, trade will still benefit both countries if each
specialists in the production of the good in which it is comparatively more efficient. This comparative
efficiency is measured by the opportunity cost of producing each good within that country.

Free trade occurs when there are agreements between two or more countries to reduce barriers to the
import and export markets. These treaties usually involve a mutual reduction in duties, taxes, and tariffs
so that the economies of every country can benefit from the various trading opportunities. One of the
most well-known examples of this approach is the USMC Agreement, which replaces NAFTA to
govern free trade across North America.
 Free trade agreements allow a country to have access to more markets throughout the world. It can
encourage local industries to improve their competition while relying less on subsidies from the
government. It is a process that can lead to the opening of new markets, and improvement in GDP
figures, and new investment opportunities.

Advantages of global free trade;

1. Trade allows countries to obtain goods and services that they cannot produce themselves, or in
sufficient quantities to satisfy domestic demand. This would generally occur because of a lack of
adequate resources. For example, a country may lack the necessary technology to produce certain
manufactured goods.
2. Free trade allows countries to specialise in the production of the goods and services in which
they are most efficient. This leads to a better allocation of resources and increased production within
countries, and throughout the world.
3. Free trade encourages the efficient allocation of resources. Resources will be used more
efficiently because countries are producing the goods in which they have a comparative advantage.
4. A greater tendency for specialisation leads to economies of scale, which will lower average costs of
production and increase efficiency and productivity even further.
5. International competitiveness will improve as domestic businesses face greater competitive
pressures from foreign producers, and governments will encourage domestic industrial efficiency.
6. Free trade encourages innovation and the spread of new technology and production processes
throughout the world.
7. Free trade leads to higher living standards as a result of lower prices, increased production of
goods and services and increased consumer choice as countries have access to goods that a lack of
natural resources may otherwise prevent. The opening up of global markets leads to higher rates of
economic growth and increased real incomes.

8. Free trade creates economic growth opportunities.

The free trade agreements in North America helped the U.S. economy grow by an average of 0.5%
per year more than it would have otherwise. When countries can freely move products across
borders, then each nation gets to take advantage of the manufacturing, commercial, and industrial
strengths of every other economy in the agreement. That means there are lower cost burdens to
worry about with each transaction, prices stay lower, and there can be healthy competition in the
market.

9. There are more opportunities for foreign direct investment.

When nations remove the barriers that are in place for free trade, then more companies are willing
to invest in other countries. There are new investments, partnerships, and opportunities that develop
because of this approach in markets of any size. That means you can focus on creating deeper, more
fulfilling relationships with other governments who share the same perspective of the world today.
 Countries with shared borders can promote a better standard of living because it is harder to go to
war with someone who is your economic partner.
10. There are more opportunities for foreign direct investment.
When nations remove the barriers that are in place for free trade, then more companies are willing
to invest in other countries. There are new investments, partnerships, and opportunities that develop
because of this approach in markets of any size. That means you can focus on creating deeper, more
fulfilling relationships with other governments who share the same perspective of the world today.
Countries with shared borders can promote a better standard of living because it is harder to go to
war with someone who is your economic partner.

11. It lowers the taxes that consumers and businesses pay.

The inclusion of tax and investment protection in free trade agreements make it possible to guard
the interests of local business owners more efficiently. When these safeguards disappear, then the
result tends to favor the consumer because more competition from global agencies can happen at the
level of consumption.
12. This advantage reduces stagnation within markets, though at the risk of eliminating smaller
businesses from the equation. Lower assessments and fewer restrictions to entry can also reduce
pricing for customers.
13. Fewer government expenditures occur because of free trade.
Several domestic industries receive financial benefits from the government, including farming and
other areas of agriculture. This money goes from the taxpayer to the producer as a way to counter
the impact that tariffs have on the import and export markets.
14. By injecting new best practices and creating new competencies into the domestic delivery systems,
less government money is necessary to keep prices affordable at the local level. This advantage
means that the tax revenues can go toward infrastructure needs, social programs, defense, or other
community requirements without keeping unprofitable business ventures afloat.
15. It creates better goods.
When free trade occurs, then each market receives more access to higher-quality goods at lower
prices. Cheaper imports help to ease the pressure of inflation in the United States because of the
American relationships with China and Mexico. Prices are held down by over 2% for every 1%
share in the market of imports that come from countries with a lower income level. That means the
average U.S. household has more money to spend on other products. The requirement of innovation
here means that businesses are constantly finding ways to solve problems for consumers.
16. Free trade involves more than just consumer goods.
At least 50% of the imports to the United States each year are not consumer goods. They are inputs
for producers who are based in the U.S. so that domestic production costs can go down. This
advantage also promotes economic growth because it diversifies the supply chain for an
 organization of any size. Even micro-businesses, freelancers, and gig specialists can benefit from
this advantage because the Internet provides immediate access to cheaper goods, new research, and
service expansion opportunities.
17. It helps the people who have the least amount of money to spend.
Some people believe that more wealth can only come when a country can export more of its goods
or services to other nations. The economic reality of free trade is that it is the total level of imports
and exports that accurately reflects prosperity. When the people at the lower tier of the national
income levels have more money to spend, then the entire economy benefits. That’s why the removal
of tariffs is such an integral part of this process.
18. Cheap sneakers that come from China might have an import as high as 60% some years in the
United States. If you were to purchase a part of Italian leather dress shoes, the tariff might be less
than 9%. Regular drinking glasses have a tariff of almost 30%, but crystal glasses have one at 3%.
When more Americans can buy cheap imports, then it encourages non-Americans to invest more in
the country.
19. Free trade creates more opportunities to solicit workers with expertise.
Automakers sent jobs to Mexico because of NAFTA, and then decided to import the vehicles back
to the United States because of the favorable tariff policies. Although this issue took some jobs from
American laborers, it also gave companies the chance to find workers from almost anywhere in the
world with the right levels of expertise. By looking to foreign markets for this help, the costs stay
down for the manufacturing process to maintain pricing at competitive levels.
20. This advantage also means that multiple economies around the world can benefit from this
approach. It is one of the reasons why India has one of the fastest-growing Middle Class sectors in
the world today.
21. Experts get to have access to the most resources with free trade.
Free trade agreements attempt to put the most opportunities into the hands of the people who can
create successful outcomes. There are no border restrictions to this advantage. That’s why anyone
can become whatever they want to be in life if they have access to an economy built on this
principle. The amount of competition that becomes available is the primary driver of what local
populations think is possible. Anyone can become what they want to be in life if they work hard
enough to reach their goals thanks to the fewer economic restrictions that exist with this
opportunity.
 Economists generally support global free trade because it will still benefit both countries. Free trade
around the world is becoming increasingly barrier-free, but there are still many people who think that free
trade is bad for the economy. They believe that free trade hurts domestic production, while that may be
true, the advantages of free trade lead to increased increases prosperity of specific countries—and the
citizens of all participating nations—by allowing consumers to buy more, better-quality products at lower

costs. It drives economic growth, enhanced efficiency, increased innovation, and the greater fairness that
accompanies a rules-based system. These benefits increase as overall trade—exports and imports—
increase.