Critically Discuss the Arguments for Free Trade, Paying Attention to Winners and Losers

1117 Words Oct 21st, 2012 5 Pages
1. Critically discuss the arguments for free trade, paying attention to winners and losers.

Free trade as an argumentative policy which has being discussed up till these days since it was established. Debaters formed by two groups of people where one kept being supportive and one held back against this policy. Although the opposing side lists out three points which are unbalanced development, economic dependence and environmental problems to prove that free trade is harmful to less developed countries. On the other hand, supporters try to use increase production and efficiency, economic growth and employment opportunity and consumer satisfaction to prove that all parties benefit from free trade where less developed countries only be
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Exporting and importing will solve the problem of labor shortage and surplus. When a country faces the problem of labor shortage, others can provide working labor by free trading, vice versa. Eventually, economic growth can be enhanced by creating more job opportunity and at the same time as working labor increases, productivity efficiency will increase together with Gross Domestic Product (GDP). According to the free trade concept mentioned above, decreasing production cost can also speed up economic growth. This idea can be clearly seen from the trend in Diagram 2. On contrary, when competing with other countries, some well-developed country can pay higher wages to drag away experts from their foreign countries even if they might not perform well after trading which cause a phenomenon named Brain Drain. The fact is Brain Drain is a very common issue nowadays, even companies themselves contains liquidity. Although in short term some of the experts are not used efficiently, but after a long time by the free trade agreement, countries can supplement each other where a future economic growth can still be seen.

Diagram 2

Last but not least, free trade increases the consumer satisfaction as they can enjoy cheaper and more variety of goods from the global markets. Besides, as free trade causes a more severe competition within businesses, new ideas are needed to draw

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