Positive And Negative Effects Of Free Trade

Everyday, countless interactions occur between nations around the world. Many of these exchanges are political or social, but a vast amount are also economic. Free trade is something that many countries partake in, or wish to partake in, in order to improve their overall production and consumption of goods. Free trade is sometimes referred to as laissez-faire trade because of the “hands off” approach from the government it incorporates. By having the ability to trade freely with other nations without the government placing restraints (often in the form of tariffs) on the exchanges, both countries involved in the trade increase their number of goods. Free trade is successful because it allows each country to produce the product that they possess

Small farmers in Mexico have gone completely out of business, and many Mexican citizens are starving. One in every five children in Mexico don’t have enough food on a daily basis, and thus suffer from malnutrition. Millions of Mexicans live in poverty and can’t afford the high prices of food. The price that farmers received from growing crops declined, forcing them out of business, while the overall price of food increased, and many citizens could no longer afford it. All of these things are a direct result from free trade. Through Nafta, Mexico received an enormous amount of staple crops from the United States. The effect was completely opposite of the intended purpose. Mexican farmers went out of business as they could no longer compete with the US crop importations. The prices of food rose and millions of citizens that no longer had jobs couldn’t afford it. Nafta was supposed to help both countries, but in the end caused more harm than good, especially to the small farmers who lost vast amounts of money, and many lost their

On paper, it appears that there would be no negative consequences of free trade. Minimizing opportunity cost and utilizing a country’s comparative advantage seems like a perfect scenario. However, in real life, that is not the case. Many people, especially those doing the dirty work in developing countries, aren’t helped by free trade, and are often hurt by it. On the other side, many people are helped. Developing countries gain access to the wealth of developed nations, and developed nations can use developing nations to make things that they don’t feel like making, allowing for specialization of certain goods. As a whole, I think free trade is beneficial, but not necessary. The Mexican and Haitian farmers were doing well enough without free trade to live productive lives and make decent money. The US farmers were also doing well before the trade agreement with South Korea, but then saw conditions improve