The Pros And Cons Of Free Trade Agreements

Opinions about free trade pre-date the Civil War. Northern states that did not rely on slavery generally supported high tariffs to protect their manufacturing businesses. Southern states, on the other hand supported free trade agreements. This is because free trade made it easier for the states to export cotton and other produce without tariffs or strict regulations (Destler). Today, free trade agreements, or FTAs, are facing a similar predicament. While free trade allows for products to be exported cheaply to foreign markets, it also displaces jobs and has lead to trade deficits. Today, free trade is being analyzed to determine whether if it positively or negatively impacts the overall economy, and whether FTAs need to be revised or repealed. Those who support free trade argue that more products will be imported without tariffs or restrictions, so in the end they will cost the consumer less. Those who wish to eliminate free trade agreements argue that they cause increased unemployment due to competition and cheap foreign labor. They argue that companies from developing countries should pay America to conduct business. Free trade …show more content…
Consumers may reap the benefits of the cheap products, but the American companies suffer. Likewise, the opening of borders has improved the economy of developing countries; however, the economy of the United States has not improved. “The U.S. goods trade deficit with Mexico was $58 billion in 2015, a 8.4% increase ($4.5 billion) over 2014” (“Mexico”). Many large companies in the United States have gone multinational and offshored production to developing countries. According to a study by Robert E. Scott, the Senior Economist and Director of Trade and Manufacturing Policy Research of Economic Policy Institute, the United States lost 3.2 million jobs to China between 2001 and 2013