DeanAlligatorPerson575
Please read and try to connect with the response and then…
Please read and try to connect with the response and then continue the conversation to demonstrate insight into the topic, critical and reflective thinking, original ideas, and supporting details and examples when appropriate. Responses should be substantive in nature and not simply “I agree” or “good point”.
at least two hundred word response to both questions .
1.
Generally speaking, free trade benefits both trading partners because it can increase competition, lower prices, and provide customers with a more comprehensive selection of goods and services. Despite this, some say that the free trade system is not fair as some forms do not provide sufficient protection for workers and the environment. It depends, in the end, on the context and the implementation of the program.
The topic of free trade has been widely debated worldwide, and it is complex. Many advocates of free trade claim that it is a critical component of global economic recovery, a means of raising living standards and reducing poverty. Critics of free trade, however, point to the fact that it may increase inequality, displace domestic workers, weaken environmental regulations, and reduce certain labor protections. The debate surrounding free trade is one of the most provocative issues in the field of international economics at the end of the day.
Free trade agreements have many advantages over other types of trade agreements. These agreements are designed to increase the amount of trade between two or more countries. The following examples of benefits can be derived from increased international trade.
Dynamic business climate- When a country does not have a free trade agreement, it often protects its domestic industries and businesses. The lack of competition in the global market caused them to become stagnant and non-competitive due to this protection. After removing the protection, they became motivated to become global competitors.
Lower government spending- Many governments provide subsidies to local industries. There will be a better use of these funds in the future once the trade agreement removes the subsidies.
Industry expertise- Compared to domestic companies, global companies have greater expertise in developing local resources. This is particularly true in the mining, oil drilling, and manufacturing industries. To develop natural resources, multinationals work with local firms and train them in how to make the best use of the resources. Free trade agreements allow global firms to take advantage of these business opportunities. It gives local firms access to these new methods, giving them an advantage over their competitors.
Technology transfers- It is also through their multinational partners that local companies have access to the newest technologies. Jobs are created as a result of the growth of local economies. There are multinational companies that provide job training to local employees in order to help them find a job.
A few disadvantages of Fair Trade are:
Theft of Intellectual Property- Many developing countries do not have laws protecting patents, inventions, and new processes when they are invented. Despite the laws they do have, they are not always strictly enforced. This is because corporations are often subjected to the theft of their ideas. Then they have to compete with domestic knock-offs at lower prices to remain competitive.
Poor Working Conditions- There is the possibility that multinational companies may outsource jobs to emerging market countries without adequate labor protections in place. Because of these factors, women and children are often forced into grueling factory jobs performed in substandard conditions.
Reduced Tax Revenue- A number of small countries struggle to replace the revenue they lose due to import tariffs and fees.
2. Free trade is fair to businesses seeking to expand but it does not favor the rights of workers or seek to improve working conditions. Instead, free trade seeks to eliminate pay discrepancies (imbalances) from country to country. Meanwhile, fair trade promotes fair wages and working conditions for laborers.
Proponents of free trade emphasize the reduction in barriers between countries and the elimination of preferential policies that favor countries or specific industries. Free traders believe that a business should succeed or fail based on its ability to respond to the free and open market, without needing special governmental protections to protect the industry or its workers. Many free trade advocates advocate for the elimination of tariffs and subsidies and oppose regulations that force companies to pay extra for doing business in foreign markets. It is well known that many products of interest to developing countries are often blocked by non-trade barriers (NTBs) in developed countries. This has been particularly true of agricultural and textile products. But does this imply that if these NTBs were removed then trade would necessarily be free and fair? But first to answer the question, what is free trade? This implies the movement of commodities and services between countries unhampered by any tariff or non-tariff barriers. Suppose this was true. Then would this trade be fair? The concept of ‘fairness’ so to speak is probably derived from a remarkable proposition in trade theory which says that free trade would not only expand the world output of all commodities but also equalize wage rates, rentals, return to land, etc., between countries The logic is simple. If, for example, India has plentiful labor, production of commodities that use more labor would shift to India and out of countries where labor is in short supply (for example, the US). This would raise the demand for (and hence the price) of labor in India and reduce correspondingly demand and price of labor in the US As India exports more and more of this labor using commodities to the US, ultimately the wage rates in the two countries would equalize. By the same logic, so would the payments to other means of production like capital, land, skilled labor, etc.
