Free Trade

Topics: International trade, Economics, Government Pages: 2 (514 words) Published: February 6, 2006
Economists define free trade as the ability of people to undertake economic transactions with people in other countries free from any restraints imposed by governments or other regulators. To date the United States is the country closest to a complete pure free trade. In which we are one of the most powerful and richest countries in the world. In the next few paragraphs I will go over the benefits and consequences socially and politically that come with free trade. As well as how economist view free trade a beneficial to a society. For economists, the benefits of free trade are explained by the theory of comparative advantage, which defined means a lower relative cost of production than someone else. With this as long as each country specializes in products that it has a comparative advantage in, trade will be beneficial to both countries. Yet some economists argue that free trade with developing countries, where wages are usually lower and working hours are longer than in developed countries is unfair because it has the ability to wipe out jobs in high-wage countries weakening the economy. When it comes to the social aspect of free trade my views are how we as consumers are affected by free trade. Some of the benefits of free trade/ Specialization are as consumers when we specialize in certain products and engage in trade we often benefit the most from this transaction; because we receive a product at a lower cost from trade then we would from domestic production. Also we are able to receive a broader array of consumer products from trade, because we are not depleting our scare resources on vase amounts of products we are unable to produce in the first place. Yet even thought this may seem fantastic if we let too much trade take place, domestic production may fall. This is caused by the inability to compete with foreign production causing industries to collapse and having consumers dependency of foreign goods to increase, in which away from our domestic...
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