Free Trade Vs Protectionism Essay

960 words - 4 pages

Arguments for Free Trade among Nations as opposed to
Arguments for Protectionism

In economics, trade, both nationally and internationally is a subject that is highly debated. Trade affects every one in every nation, has a significant impact on a country’s standard of living and can be used to foster new ideas and products. There are currently two opposing policies of how to conduct trade, protectionism and free trade, also called laissez-faire. A county’s comparative advantage at producing certain products causes many debates over why one way of trade is better than another.
Tariffs, embargo’s and quota’s that are put on trade are forms of protectionism, which is the restriction of ...view middle of the document...

National security is a highly debated reason for protectionism.1 In the event of conflict or war between other nations, that may have comparative advantages over each other in important industries such as steel and agriculture, the threat of stopped trade could threaten the survival of each government. Putting high tariffs and quotas on such products may ensure their continued production domestically and availability in time of need. Free trade is the opposite of protectionism and for every one of the arguments provided in favor of protectionism there is a counter argument in favor of free trade.
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs or subsidies.4 Innovation is best motivated by competition, and free trade allows competing business’ to find new technologies and better ways to provide what they produce.6 Increased productivity as a result of innovation allows normal citizens to afford more products and raise their standard of living.5
A moral argument for free trade is that it could be good for the environment.7 Free trade would allow for the production of goods to be made in the regions that are most environmentally appropriate and since more natural resources would be used, pollutants from fossil fuels such as coal and oil would decrease.
Economic growth is often cited as a reason for free trade. With free trade, meaning no tariffs, embargos or quotas, goods and services are more widely distributed which increases their demand. As an economy grows so does its demand for goods and services, and the increase in the demand can create new businesses and expansion of existing ones. The new businesses and expansions increase the demand for more jobs and better pay for its workers.6
When there are no protections or restrictions on...

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