Why the World Doesn't Have Free Trade

As early as the late 18th century great minds such as Adam Smith and David Ricardo have come up with the idea that free trade would help that world. The argument behind free trade would be that all resources could be produced exactly where they were found or mined, and this would be the most efficient and cost effective way to get resources around the world. Furthermore, if all countries relied on other countries for specific resources, this would cause less conflict in the world as many countries would be dependent on others for quality of life. Despite all these benefits of free trade, how come the world has not shifted into a system of free trade? While free trade comes with a lot of advantages for many people around the world, the disadvantages of free trade outweigh the benefits it creates. 

The first argument against free trade is that it creates job loss. Although there are some arguments about this disadvantage, it is easy to see how people could lose their jobs from free trade. If there were a lot of steelworkers in the country to keep up with high steel demand in the United States, but all the sudden tariffs from foreign steel were removed and people could get steel at a cheaper price, demand for steel would go down, and in turn steel employees in the United States would be fired. Furthermore, another critique of free trade is the toll it takes on human rights. While it may be cheaper to produce something in another country, and even more efficient as well, some of these countries do not have the same labor laws as the United States. Therefore, although it may be quicker and cheaper to get a resource from another country, there is always the possibility that the resource was created by children, or someone forced to work long hours in poor conditions for minimal wage. 

While free trade has a lot of negative effects on people in certain countries, it negatively affects the governments of these countries as well. Free trade in the United States (or in any country the United States is just my example) would allow for the consumer to get products from all around the world. This ability to get products for cheap in any market in the world (many of these markets would have government subsidies or relaxed regulation control) would reduce economic efficiency. Furthermore, getting products to the United States from other countries to improve labor capital is also a contribution to reduced economic efficiency. Due to all of the negative effects of free trade, it can be seen why the world has not shifted into an era of free trade, because the cons outweigh the pros in this case.


 

Comments

  1. Hayden Groves March 24, 2022 at 10:36 AM

    While free trade does come with its cons, I think it is also arguable that the benefits of international free trade may outweigh the disadvantages. While I also agree with the humanitarian portion of your argument, resources such as fast fashion or mica (a product in makeup), both are commonly mined/created by children who work in unsafe conditions and much too long working hours that are not sustainable. The modern day trade system is currently not free, yet these humanitarian travesty are still occurring everyday. I question whether or not human rights violations would be committed at a higher rate than they unfortunately already. The benefits, such as higher quality and lower priced goods, more economic growth, more efficiency and innovation, as well as more competitiveness within the economic sphere. While I can make an opposing argument, I think there are both pros and cons to having a closed market trading system and a free trade market, and both are arguable for each side.

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  2. Madison McCormackMarch 28, 2022 at 10:13 AM

    After reading your blog, I thought that you clearly explained your argument, which helped me understand what direction you were going to take your blog. Why the world has not shifted towards using a free trade system is something I myself have contemplated, and reading your blog helped supply me with reasons as to why that shift might not have occurred yet. Although these were reasons I was slightly aware of, your explanation helped explain to me the logistics of why a free trade system hasn't happened yet. A recommendation I have would be to incorporate some direct quotes from one of the readings from class into your blog. I know you mention Smith and Ricardo, but maybe sampling a quote from them could strengthen your argument and make it more scholarly. Overall, I think your blog was clear, concise, and easy to follow, which are all great qualities to have.

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  3. Kevin KlukowiczMarch 29, 2022 at 6:12 PM

    I think your blog has some pretty valid points about the limitations of free trade, however, I would be careful with what you are arguing. For your evidence regarding why international free trade isn't normalized, you talk about job loss, human rights violations, and the overall reduction of economic efficiency. The commonality between all these cons is the fact that they all relate specifically to the United States, not necessarily other wealthy and developed countries. Including the United States as an example to prove your point is very insightful, but if you went into depth about the specific economic effects as a result of free trade between the U.S. and another country, it would provide greater evidence while proving your claim about international trade. Other than that one point, I think you made a valid and perceptive argument against the utilization of free trade.

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