Free Trade Debate

History and Debate of Free Trade

Free trade is an economic policy under which the government does not interfere with trade. No tariffs are applied to imports or exports, and people are allowed to trade goods and services as they please. Supply and demand dictates the prices for which goods and services sell and are the only factors that determine how resources are allocated in society. Under a free trade system, there are no trade barriers. There is free access to markets and market information, and there are no government-imposed monopolies.

The Free Trade Debate Controversy

Those who support free trade believe that it allows companies to come by raw materials and lower prices, which, in turn, results in lower prices on the open market. Supporters also believe that the levels of employment in a nation are determined by the monetary policy of that nation and not the trade policy. Thus, the free trade economy of the U.S. is not to blame for the increasing levels of unemployment. Many jobs are leaving the nation, but supporters of the free trade debate argue that if companies could not outsource their labor to other nations, they could just automate these processes anyway. Additionally, when people work for a profit and must compete, they produce better products and are more motivated to increase their education and knowledge because these increases come with personal benefits.

Many believe that the government should dictate prices and impose more taxes on imports and exports. Critics often believe that many outsourced jobs are a result of fair trade practices; regulating trade could keep companies from finding cheaper labor overseas. They also argue that this outsourcing of labor results in fewer workers in the U.S. who are trained to do certain types of work. Should a war emerge, they doubt that there are enough workers trained to carry on production back home. There are also concerns with the social burden of limited job security. Critics feel that this results in a more worried, cautious public that is less likely to invest in the economy. This is certainly not an advantage when the economy is already in recession.

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