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Critically Discuss the Arguments for Free Trade, Paying Attention to Winners and Losers

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1. Critically discuss the arguments for free trade, paying attention to winners and losers.

Free trade as an argumentative policy which has being discussed up till these days since it was established. Debaters formed by two groups of people where one kept being supportive and one held back against this policy. Although the opposing side lists out three points which are unbalanced development, economic dependence and environmental problems to prove that free trade is harmful to less developed countries. On the other hand, supporters try to use increase production and efficiency, economic growth and employment opportunity and consumer satisfaction to prove that all parties benefit from free trade where less developed countries only be less benefits. In this essay, as one of the members supporting free trade agreement I will look deeper into all six points and prove how the advantages within far more excel the disadvantages.

Firstly, increase production and efficiency is the most significant advantage of free trade among the above three points. As different countries specialized in different fields, by making use of this comparative advantage, they can allocate resources in the most efficient way where therefore export increases a country’s production demand and import increases competitions between companies where they have to decrease price as a result, the resources are bought cheaper due to competition. With the example shows in Diagram 1, it can convince the theory mentioned above. One good of the imports from other country to domestic country, under free trade regulations the price for this good will decrease and the quantity demand increases. Therefore, the overseas companies will enjoy more demand for their product. Although some might argue that the domestic market producer will suffer as most of the demands are being transferred to imports, lower price

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