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Winners and Losers in the Arguments for Free Trade - Essay Example

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Winners and Losers in the Arguments for Free Trade

This surge in the flow of services and goods will undoubtedly increase competition that, in turn, will lead to a decrease in the price that consumers have to pay for goods to the traders. When these elements are all combined, most economists are of the belief that global and individual economic growth will be achieved. The comparative advantage theory states that every country will produce goods at which they are extra efficient at production. So long as each country is able to produce goods that give it more comparative advantage, trade becomes mutually beneficial. One argument for free trade is specialization. Through exporting and importing goods, nations come to rely on each other for the production of services and goods at which it might not be too efficient at doing itself (Voituriez and Ekins, 2009, p. 11). When producers and countries are allowed to specialize in production of various services and goods, they attain more efficiency in service and goods production. It also lets individual countries produce services and goods for some things that they may have not been in a point to back when they had to produce everything they needed themselves. Specialization also allows countries, which had to provide services and goods for themselves when they were still not available via trade, to carry out other tasks. Yet another argument for free trade is efficiency. Free trade enhances a country’s efficiency, which, in turn, leads to an increase in the number of services and goods that country or individual can produce using the same resources (Voituriez and Ekins, 2009, p. 11). This encourages corporations to look for other ways of decreasing wasted resources that, in turn, decrease the production costs of goods. Various firms may also seek to increase their production because of the increased demand that will inevitably rise due to the existence of free trade. This will happen when they realize that it is possible to produce extra units at a per unit price that is decreased. One more argument for free trade is an increased standard of living for the involved parties. Increased specialization and efficiency allow these parties to attain a higher living standard. As more services and goods are purchased and sold via exportation and importation, the amount of cash resources that are available in these nations can only increase. With individuals making more cash, they possess more money that they can spend on services and goods that they could use to import services and goods that can satisfy their other needs (Voituriez and Ekins, 2009, p. 12). Finally, free trade allows its participants to attain a better quality of life. Besides monetary gains to be gleaned by countries involved in free trade, economists use the argument that free trade highly improves the quality of life for its citizens. Free trade leads to the decrease in the possibility of war outbreaks, enhances the security of the nation, and leads to increased cultural enrichment and awareness (Voituriez and Ekins, 2009, p. 13). The belief is that these countries depending on each other for services and goods are not likely to go to war with each other. Additionally, it is likely that they will rely on each other’s defense when a situation pops off. This idea of free trade also exposes individuals to various cultures that exist around the world that result in their personal enrichment. Winners in Free Trade The biggest winners in free trade agreements are transnational corporations. Free trade agreements erase tariffs, meaning that corporations pay less for them to sell their products. With reduced tariffs, for example, electronic producers can ...Show more


Free trade can be defined as the ability of most countries to either export or import without any regulatory or government restraints. Economists posit the fact that free trade leads to the increase of trade and productivity among countries via decreasing various barriers to trade…
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Winners and Losers in the Arguments for Free Trade
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