Fta Advantages And Disadvantages

FTAs are designed to decrease the barriers to trade between two or more countries, which are in place to help protect local markets and industries. FTAs also cover areas such as government procurement, property rights, and competition policy. Reducing trade barriers helps industries get into new markets, accelerating their reach and the number of people they can sell their products to. FTAs are also ultimately designed to benefit consumers. In theory, increased competition means more products on the shelves and lower prices. FTA has numerous advantages and disadvantages, now I will tell about advantages of FTA. As a first, it can increase production for both countries. The purpose of trade is to provide access to a greater variety of goods

Firstly, it can bring huge damage on domestic industries by exposing them to competition from foreign producers with lower costs. In case of free trade agreement between South Korea and United States of America, because of cheap rice from U.S.A, South Korea’s agriculture had big damage. A lot of peasants were not able to sell their crops to Korea’s market. Also, this FTA trade can bring environmental destruction. Free trade can cause gigantic environmental damage by allowing companies to shift their manufacturing facilities to nations with few or no environmental regulations and by increasing access to natural resources in nations. Before the North American Free Trade Agreement became law in 1993, there was little demand for timbers or metals from Mexico. In a 2014 report, the Sierra Club asserts that NAFTA stimulated the creation of poorly regulated, highly destructive mining operations in Mexico that would not have existed without the trade agreement. Like this, free trade agreement can bring huge environmental destruction to country. In addition, FTA may cause unemployment. With the removal of trade barriers, unemployment may occur in the short term. This can give influence upon large numbers of workers, their families and local economies. Often it can be difficult for these workers to find employment in growth industries and government assistance is

For advantages, cheap and good qualitied goods are enables to Korea, so consumer can feel satisfaction among cheap goods. Secondly, because of FTA, South Korea can increase completion for long term. Also, it brings favorable relationship between Korea and U.S.A. On the other hand, for disadvantages of FTA, it brought huge declination to weak industry such as agriculture. During 15 years, agriculture of South Korea decreased