Comment this dicussion in few paragraph? International free trade is when nation
ID: 1158554 • Letter: C
Question
Comment this dicussion in few paragraph?
International free trade is when nations can interact through buying and selling with one another without having to be subjected to tariffs, quotas, or other unnecessary restrictions. It increases economic growth by leaving more money in countries that would have otherwise been spent on trade expenditures.
The North American Free Trade Agreement better known as NAFTA brought about national free trading. Canada and the United States stipulated free trade between each other thirty years ago. Afterwards, in 2016, the Trans-Pacific Partnership (TPP) sprang up to start free trade among other countries, such as Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, but it was not ratified and did not become effective because the United States withdrew its signature. The nations then entered into a new trade agreement known as Comprehensive and Progressive Agreement for Trans-pacific Partnership (Granville, 2015).
Free trade invigorates stagnant businesses that were on the verge of failure due to high trading cost. This makes the country attractive for Foreign Direct Investment and results in local companies acquiring increased information pertaining to modern technologies from their multinational partners.
Free trade can lead to loss of jobs because countries do not have to pay the import and export charges, which many could not afford previously. They will now be able to expand and move business to other countries. It led to the United States laying-off employees because of competition difficulties that TPP brought. Many American jobs were transferred to Mexico.
Free trade can also lead to poor working conditions and theft of information due to poor employment laws and non-enforcement in poorly developed countries.
Reference
Granville, K. (2015). The trans-pacific partnership trade accord explained.
Explanation / Answer
International free trade is when nations can interact through buying and selling with one another without having to be subjected to tariffs, quotas, or other unnecessary restrictions. It increases economic growth by leaving more money in countries that would have otherwise been spent on trade expenditures. NAFTA was agreed between 12 countries but after Trump coming to power USA withdrew from NAFTA. Afterwards nations then entered into a new trade agreement known as Comprehensive and Progressive Agreement for Trans-pacific Partnership. Due to free trade and for which WTO was established in 1995; costs for countries in trade reduce and trade between nations become efficient. It allows countries to attract more FDI and modern technologies to innovate and produce in most efficient ways.
Free trade can lead to loss of jobs because countries do not have to pay the import and export charges and thus the home countries production or manufacturing firms has to compete with foreign one at every dimensions of the business to stay in the market. Because of competition difficulties many jobs can move to other nations where they have competitive advantage. Free trade can also lead to poor working conditions and theft of information due to poor employment laws and non-enforcement in poorly developed countries.