In today's modern world, free trade is a factor of a country's strength, freedom, and independence. While most of the world's countries benefit off of free trade, some, refuse to trade with any country, and their country is confined to the supplies and resources limited within its borders such as North Korea. Our beautiful country of North America, however, is a completely different story. Seeing the economic benefits of free trade, North America has given the opportunity to conduct exchanges in trade with over-seas countries. Some may say this is beneficial to the economy, however others would prefer for this act to be more limited. Naturally, any political act and decision will have its supporters; as well as those who are in staunch opposition.
Perhaps the greatest argument made in favor of free trade is the issue of comparative advantage. The number one argument for free trade is comparative advantage, an idea coined in 1817 by David Ricardo, the renown English political economist, considered as one of the most influential classical economists of his time. Comparative advantage is the idea that it is beneficial for all parties concerned when each country produces whatever they excel at and is most efficient in; after which the countries then sell their products to other countries. Another idea that fosters free trade is competition, as it is clearly outlined by one of its core principles: “Competition fosters lower prices, efficiency in production, and innovation”. Functionalism is yet another benefit of free trade, for the cooperation in one field (free trade) will also be a stemming factor of cooperation in other fields of country relations. Interdependence is a huge reason why anti-war activists would likely be in favor of free trade, for it makes conflict too costly, furthermore the dependency undercutting the likelihood of war. A huge benefit that stems from free trade which affects poorer, third war countries is the introduction of capital and technology. With these new implementations, poorer countries can now expand at a most rapid rate, and with the catch up effect are able to lead their people into prosperous times much more quickly compared to other countries that will have a more constant level of slow economic growth.
Obvious pros of free trade also include: using native resources which will bring an influx of money to countries that engage in its practice. A controversial positive aspect of free trade is the fact that consumers are able to save money on the imported products they buy because they are much cheaper in most cases that products made in their own countries. This however, is much debated, for others would argue that American money, instead of staying in America, goes to countries such as China and improves their economy instead. Accessibility is also a positive, for without free trade countries would be confined to their own natural resources and products that they produce.
Of course, there are the negative sides that can be argued with free trade. A lot of economists and people in general feel that with free trade on the rise, the threat to domestic jobs is also on the rise. So while American companies will employ Chinese workers for cents on the dollar to create a product, in America these same companies would have to pay an American citizen a lot more. Naturally, the company does what is best for itself, not for its country, and therefore while unemployment is sky high in America today, there are millions of Chinese workers with jobs that could have gone to American workers. The outsourcing of jobs is a serious issue, especially here in America, and free trade makes it worse. This can be applied to any set of countries, but I am using China and the US to make a case her. Another negative side effect is the dependency of a country on just a few products; for if a country, especially a poorer once, focuses only on specializing in a few set products, and the demand of other powerful countries falls for those products, then the poorer country could fall into “economic catastrophe”. For the sensitive at heart, Cultural Imperialism is cited as a negative effect of free trade. Countries all over the world, including Latin American ones, France, and my home country of Romania, all have fallen prey to this. Because of free trade and the ensuing good political relations amongst countries, the younger generations adapt to the ways of the powerhouse countries, and lose their cultural identities and fall out of tune with their parents and forefathers’ traditional values.
Overall, free trade can be argues night and day by proponents of the idea and those against it. Macroeconomics, however, has taught me that overall one cannot give up free trade among countries, for the negatives to not outweigh the positives. Speaking from my unbiased point of view, I am able to weigh both sides, and as horrible as the extent of outsourcing from this country has become, America is still a whole lot better off than other countries that has shut off their borders to trade completely. I speak, of course, of North Korea and Cuba. Up until the revolution of 1989 which overthrew the communist regime, Romania was also cut off from the world. I hear memories from my parents and other Romanians of older generations, who have lived through this themselves. They received rations of food, rations of water, rations of TV time; they were pretty much made to live on whatever the government allotted them. There were no foreign products at all, and Romania was solely limited to whatever it could produce.
Free trade is not something that is able to come without its disadvantages or without tis losses; however, the implementation of free trade more than likely will cause economic prosperity and growth within a country, as witnessed by the majority of the world’s countries, as opposed to those countries which choose to not engage in this practice. As a senior about to graduate from one of this country’s greatest universities, I am counting on this sound economic principle to thrive and prosper for a very long time, at least long enough to pay all these student loans!!