Disadvantages Of Free Trade Essay

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Free Trade is a scheme followed by some international markets in which the countries’ governments allow imports from, or exports to other countries without any restrictions. Countries that engage in Free Trade usually lower trade barriers such as tariffs and import quotas. Many economists recommend Free Trade as the best way to maximize the potential of the global economy because it generates economic growths, fosters economic freedom, enables foreign direct investment and so on. However, some economists argue against Free Trade after highlighting its disadvantages. The following are the disadvantages of engaging in Free Trade; 1. Labour Practices; Since Free Trade lowers the trade barriers, it becomes easy for big businesses to import large amount of products from poor and developing counties which allows them take advantage of cheap labour costs. The issue is that cheap labour often has high human costs. For instance, when Jordan signed a Free Trade agreement with the United States, sweatshops proliferated in the country. This is due to the high demand of clothing by American retailers. To be able to…show more content…
Increased Vulnerability; From a strategic point of view, free trade can make a country vulnerable if it causes loss of important domestic industries. When a country starts to depend on another country for products or services, it can be subjected to great political pressure and denied access to those products and services especially if the agreement is suddenly severed. The citizens of these countries usually suffer a great loss since this affects the economy. Moreover, countries with free trade agreement might fight against expansion of the agreement which would put the country in a difficult position. An example of this occurred when Russia threatened to break its trade agreement with Ukraine and place a tariff on Ukrainian goods. This incident put a lot of pressure on the Ukrainian economy and politics which made them seek closer ties with the European

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