Advantages And Disadvantages Of Free Trade - 722 Words

Free Trade is a system in which countries are able to trade goods and services with one another. This idea of the freedom of trading originally came from Adam Smith, the father of Capitalism. He claimed that this is an act of division of labor between countries can cause specialization, increase in productivity, and unity in production. Laissez-faire is also another term that is used to refer to free trade in which the government does not interfere terms of regulating imports and exports. Although free trade policies are not necessary, the country that allows free trade means that they are also allowing their control of controlling the taxes from those imports and exports to be lost. When free trade is being practiced it could be seen as†¦show more content†¦Since other countries charge for a much cheaper price, the United States is drawn to the thought of cheap means of production because the thought of gaining more profit is in mind. Thus, it is much preferable to obtain g oods and services elsewhere. With production being bought from other countries for less, the production in the home country is not necessary therefore causing a drastic increase in the unemployment rate. The middle and lower class have been greatly impacted for their without a job they will be unable to provide support for themselves and their families, putting them in the poverty line. Trading amongst other countries can lead to vulnerability. From the text named â€Å"The disadvantages of Free Trade† written by Shane Hall, he stated that free trade leave a country vulnerable for they have become dependent upon other countries for â€Å"critical products and services†. With this in mind, the United States has been relying on other countries to receive goods that is detrimental to the country. This dependency towards other countries for resources could be the country’s greatest downfall, because of the possible conflicts that could be ignited that could terminate trading agreements. Without the trading consensus between countries, trading would not be allowed, the United States would not be able to receive the resources they need, especially afterShow MoreRelatedEssay about Advantages and Disadvantages of Free International Trade1283 Words   |  6 Pages1a) Advantages of free international trade 1. Increasing the production. Countries are enabled by free international trade to specialise or to focus in the production of the goods in which they have a comparative advantage. Specialisation countries can take the benefit of efficiencies generated from increased output and economies of trade. 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