What are the arguments for and against free trade?
The main argument in favor of free trade is that it, in the long run, helps the people of all countries that participate in that trade. Economists argue that free trade allows the world economy to produce the greatest possible amount of goods and services. Countries and regions specialize in making things for which they have a comparative advantage and they trade with other countries to get things in which they do not have a comparative advantage. That allows total global production to rise. When this happens, people around the world can, on average, have more things at a lower cost than they could without free trade.
However, there are those who feel that free trade is harmful. Often, these people focus on short-term effects. For example, they focus on the people who are displaced by free trade. In the short term (which can last a long time when compared to the life of any one person), people’s jobs can be lost because people in other countries can do those jobs more cheaply. This has happened to many Americans who worked in manufacturing. Some people also argue that developing countries cannot become rich if there is free trade. This argument holds that they cannot industrialize and modernize because they will never be able to compete with the richer countries.
While there are other arguments for and against free trade, these are the most important arguments each way.