Benefit Of Free Trade

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Free Trade is an economic policy whereas a government does not discriminate against exports and imports from international jurisdictions. Governments need not do anything to promote free trade, which is sometimes called laissez-faire trade. Buyers and sellers participate in trade without the domestic company applying any sanctions on the goods and services. Interestingly, economists have been almost unanimous in the support of free trade (Free Trade, 2017). The United States (U.S.) doesn’t participate in “true” free trade with other countries. The World Trade Organization is responsible for promoting and enforcing free trade. Most nations are part of the World Trade Organizations; however, some governments still practice protectionism…show more content…
Imports from countries like China and Mexico have eased inflation and caused lower prices in the U.S. Free trade promotes competitiveness and forces countries to lower costs. A direct result of this is lower prices for the buyer. This competition creates a dynamic business environment (Boudreaux & Ghei, 2017). An article by David Boaz reports: “The benefit of international trade to consumers is clear: We can buy goods produced in other countries if we find them better or cheaper” (Boaz,…show more content…
First introduced in the first part of the nineteenth century by David Ricardo, comparative advantage is when a country can produce a particular good or service at a lower margin and opportunity cost over another country. Specializing in industries where opportunity cost is lower leads to a boost in production and lower costs (Hann, 2011). Free trade works with other processes in the market to move resources and labor where it is most efficient. It allows the whole function to become more productive. This contributes to higher wages, new jobs, and opportunities to invest in other things. The gained efficiencies lead to innovation (Boudreaux & Ghei, 2017). More effort is placed on developing local resources and free trade gives companies access to these resources and insight on new methods of advancement and new technology (Amadeo, 2017). Free trade means that everyone follows the same system of rules and prevents participants from skewing trade advantages or providing special treatment for certain groups. Without free trade, the bigger and better industries or those with more connections can get unfair advantages. These unfair advantages might shield them from competition or regulatory requirements. Free trade eliminates these concerns and encourages fairness (Boudreaux & Ghei, 2017). Disadvantages of Free
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