Question

How do we make free trade something that is a long-term benefit to all societies, not just those that are developing? And, further, how can societies who are playing in the free trade game ensure that the people left behind are taken care of?

Answer 1

Free trade implies when there is free movement of goods services, capital, personnel, technology cross borders. Free trade at international level brings a numerous goods and services with best prices and good quality that could not be provided before in domestic market. As variety of products and services are improved along with quality and price advantage, as a result consumers in the society gets advantage from free trade in long term. However in the society the other players such as employees, domestic sellers and investors, their interest will get badly hurt with such practices and trade. They lose a great ratio of their bargaining power. Also with competition from international sellers, domestic sellers have to suffer a lot if the importing country is more advances that can facilitate the customer for better quality products at fewer prices. Off shoring would also result in less opportunities of employment for domestic labor. In this way, their interest is suffered.

To summarize, when an economy is not powerful enough to compete with other more developed nations then a sense of protectionism will be an advantage for the whole society in an economy. Few level of protectionism along with some scope of free trade will help the nation to develop healthy.