Pros And Cons Of Free Trade

Proponents of free trade often say that free trade is beneficial for any nation-state for a very simple reason. It allows workers to specialize in goods and services that they produce more efficiently than the rest of the world and then exchange them for goods and services that other countries produce at higher quality and lower cost. Indeed, free trade has been the source of prosperity in many countries over the past decade. However, in recent times, the issue of whether free trade is beneficial or not has once again reared its head and became a hotly debated subject, largely in the context of developed economies such as the United States of America (US) which saw thousands of workers lose their jobs as the economy failed to restructure

A developed nation is typically one that has gone through a significant phase of industrialisation with workers that are more educated and who demand a higher standard of living. Workers in developed economies often demand higher wages as they are generally better skilled. In these economies, advancement of technology is often prevalent and this drives innovation, allowing the country to move up the value chain. (“Innovation for Development”, 2012) Many of these developed nations initially enjoyed the benefits of free trade. Yet, it is these same developed nations who later became mired in problems such as unemployment with the lower skilled workers suffering the brunt of the nation’s inability to re-skill their workers. Why is that

It brings about economic growth, reduces imported-input costs, thus reducing businesses’ production costs and promoting economic growth and increases access to higher-quality, lower-priced goods.Cheaper imports have eased inflationary pressure in developed countries. Free trade allows restructuring of the economy towards higher value added sectors. Over time, free trade works with other market processes to shift workers and resources to more productive uses, allowing more efficient industries to thrive. The results are supposed to be higher wages, investment in such things as infrastructure, and a more dynamic economy that continues to create new jobs and opportunities. In fact, it has been argued that free trade will allow the government to increase its coffers, hence generating more money to invest in providing skill upgrading for the