Question

Describe the advantages and disadvantages of free trade. (Consider specific examples of agreements such as the Trans-Pacific Partnership or TPP.)

Answer 1

Advantages:

No restriction on imports and exports

Consumers have access to all foreign goods and services that too at same prices

Producers have a large market to cater to, which they can use to export their products globally

Production and export income and GDP of countries engaging in trade increases

Disadvantages:

Producers of small countries face a high degree of competition from foreign producers

Certain countries engage in dumping which harms importing countries

Producers who are unable to compete with foreign goods are at loss and thus there sales fall

This can also result in unemployment as jobs get displaced as production falls