What Is A Major Argument Against Free Trade Agreements

Another common argument against free trade is that it is risky to depend on countries that are potentially hostile to vital goods and services. It is under this argument that certain industrial sectors should be protected in the interest of national security. While this argument is not technically inaccurate, it is often used much more broadly than it should be to protect the interests of producers and special interests at the expense of consumers. Despite these virtues, many people justify trade restrictions. Keeping money in the country is not a priority. We do not want exports to be high because they keep money in the country, but because they stimulate domestic production and income. If that revenue is spent on imports, it can be very good for consumers. From the economists` point of view, the way to promote exports is not to limit imports. In any case, other nations will take retaliatory measures against protectionist measures. The way to export promotion is to be as innovative, productive and efficient as possible.

Second, it could ruin the domestic industry. Because of free trade, imported goods are available at a lower price. This is how unfair and unbridled competition between domestic and foreign industries develops. In doing so, the domestic industry is wiped out. The Indian craft industry suffered under British rule. If developing countries have relatively new industries, these industries would currently be fighting international competition. However, if they invest in the sector, they could gain comparative advantages in the future. Free trade agreements create larger markets for companies to which they can sell their products. This means that instead of producing whatever is needed within a country`s borders, countries can specialize in making the things in which they stand out and, instead, they can import other things that would cost them to produce. This will increase productivity and grow the economies of trading countries. It was estimated that without the single market, the GDP of the EU as a whole would be 8.7% lower.

Secondly, because of unlimited trade, global production has increased since specialization, efficiency, etc., large-scale production.