Free Trade Agreement Disadvantages

The outsourcing of employment in developing countries can become a trend with a free trade area. In the absence of occupational health and safety legislation in many countries, workers may be forced to work in unhealthy and low-quality work environments. What are the main advantages and disadvantages of global free trade? A free trade area deals with the elimination of customs duties and the measures applied to Member States when they trade with each other. This means that there are no common guidelines applicable to all members and that each country in the free trade area collects its own customs duties and quotas. Thirdly, if there were no international competition, the internal market would be so narrow that it would be relatively easy for business organisations in many sectors, for example. B motor vehicles, paper and electrical appliances, to exercise some control over this. Free trade is often an effective way to break national monopolies. Despite all the advantages of a free trade area, there are also some disadvantages, including 1. free trade does not create more jobs. It is a myth to say that free trade encourages employers to send their jobs abroad. It would also be wrong to say that increased competition would create more employment opportunities. It reduces the number of opportunities available in inefficient sectors.

The positions that remain will see an increase in their overall wages and an improvement in living standards, but this does not lead to unwanted jobs abroad. It eliminates the policy of saving a job at all costs, even if the opportunities of this sector are diminishing. 4. Due to free trade, there may be less protection of intellectual property. IP rights are not always taken as seriously by international governments or business competitors as in a company`s home country. Patents, processes and other inventions, including branding, graphic displays and imaging, are sometimes copied in a free trade environment. This disadvantage reduces a company`s opportunities to create new jobs at the local level while offering decent wages. Assessing the value of NAFTA is not a simple or simple matter. However, many experts believe that free trade agreements are a necessity for the United States when it competes in an increasingly globalized world. 5.

It creates better goods. When free trade takes place, each market will have more access to better quality products at lower prices. Cheaper imports help reduce inflationary pressures in the U.S. due to U.S. relations with China and Mexico. Prices are maintained at more than 2% for 1% market share for imports from countries with lower income levels. This means that the average U.S. budget can spend more money on other products. The demand for innovation means that companies are constantly finding ways to solve consumer problems.

The disadvantages of NAFTA are considerable. Can anything justify the loss of entire industries in New York or Michigan? The mistreatment of workers in the Maquiladora programme is also a cause for concern. NAFTA may also be responsible for environmental damage along the border. Free trade creates international specialization because it allows different countries to produce products in which they have comparative advantages. International trade allows countries to reap the benefits of specialization. First, a wide variety of products can be preserved. 1. Free trade creates opportunities for economic growth.

Free trade agreements in North America have helped the U.S. economy grow an average of 0.5 percent more per year than it would otherwise have. If countries can freely move products across borders, each nation can use the production, commercial and industrial forces of any other economy in the agreement. This means that with each transaction there are fewer cost charges to worry about, prices can remain lower, and there can be healthy competition in the market. . . .


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