Focus Question: What are the arguments for and against free trade?
Introductory video https://www.youtube.com/watch?v=5ITyd1Pzek0
Video explaining NAFTA https://www.youtube.com/watch?v=371CRxnGkA8
Arguments for Free Trade:
- Increased Competition: more trade results in more competition abroad, which encourages cutting costs and increasing efficiency.
- Trade increases Economic Growth: trade growth has contributed to global economic growth.
- Free trade makes use of surplus raw materials: countries are able to sell and benefit from excess resources.
- Tariffs may encourage inefficiency: If an increase in tariffs protect the domestic industry there may be less incentives to cut costs.
- Economists who support free trade:
- Adam Smith: The Wealth of Nations (1776) https://www.youtube.com/watch?v=5JMSUzv5Yow
- David Ricardo: On the Principles of Political Economy and Taxation (1817)
- John Maynard Keynes: The Economic Consequences of Peace (1920)
Arguments Against Free Trade:
- Senile Industry Argument: In industries that are declining and inefficient it may take significant investment to modernize.
- Free Trade discourages Diversification: developing nations in free trade market can rely to heavily on primary products, which can fluctuate or have decrease in demand.
- Decrease in Import Taxes: import taxes can be used to raise federal money
- Culture identity: Many nations see Free Trade as Americanization or Commercialization
NAFTA's effects on Mexico https://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta/under-nafta-mexico-suffered-and-the-united-states-felt-its-pain
Comments (0)
You don't have permission to comment on this page.