Free trade is an economic policy under which the government does not interfere with trade. No tariffs are applied to imports or exports, and people are allowed to trade goods and services as they please. Supply and demand dictates the prices for which goods and services sell and are the only factors that determine how resources are allocated in society. Under a free trade system, there are no trade barriers. There is free access to markets and market information, and there are no government-imposed monopolies.


The Free Trade Debate Controversy

Those who support free trade believe that it allows companies to come by raw materials and lower prices, which, in turn, results in lower prices on the open market. Supporters also believe that the levels of employment in a nation are determined by the monetary policy of that nation and not the trade policy. Thus, the free trade economy of the U.S. is not to blame for the increasing levels of unemployment. Many jobs are leaving the nation, but supporters of the free trade debate argue that if companies could not outsource their labor to other nations, they could just automate these processes anyway. Additionally, when people work for a profit and must compete, they produce better products and are more motivated to increase their education and knowledge because these increases come with personal benefits.

Many believe that the government should dictate prices and impose more taxes on imports and exports. Critics often believe that many outsourced jobs are a result of fair trade practices; regulating trade could keep companies from finding cheaper labor overseas. They also argue that this outsourcing of labor results in fewer workers in the U.S. who are trained to do certain types of work. Should a war emerge, they doubt that there are enough workers trained to carry on production back home. There are also concerns with the social burden of limited job security. Critics feel that this results in a more worried, cautious public that is less likely to invest in the economy. This is certainly not an advantage when the economy is already in recession.

Free trade is what world economics would be if the world were perfect.  It represents free entry and exit into markets and determines who wins and who loses.  It allows creativity and success for people who are good at what they do and maximizes utility of the world's resources.  It makes things as close to perfect as possible.

When countries export what they do best, they maximize the value of their goods and services and people maximize their utility of goods and services they import.

I won't get too much into theory but I challenge anyone to tell me why tariffs and taxes, which drive up costs and make things more expensive, are better.  Protectionism needs to go away if someone else does something better than you.  The U.S., for example, protects their cars against Japanese and German cars.  But GM continually recalls all sorts of problems because we're (Americans) aren't as good at cars as other countries.  And most of our vehicles are manufactured or assembled out of our country anyway.

Free Market Economy.  I love it.  Free trade?  Even better.  Tax it all and collect revenue but tax it all equally.

As early as the 16th century adam smith had argued free trade was paramount to economic success.
The mercantile trade of europe stiffled economic growth and weakened äll concerned partys.
Free trade is slowly becoming a reality.
The Eu has free trade, and is negotiating free trade with the USA.
In a time when eastern markets at rising, anægreement between the western nations would be a huge boost to the economies.
Random tax rates just drive buisiness away.

It is, along with minimal government regulation over the economy, the only path to general prosperity. Without *some* for of free trade, countries/regions north of the 45th parallel would basically starve to death during winter. Sure, greenhouses are more efficient than they were, but can you imagine the COST of heating and maintaining them? Even Adam Smith thought that growing wine in Scotland was a ludicrous idea.

Free trade is also good for the environment. Economist Pierre Desrochers and his Japanese wife (her name eludes me, sorry) both wrote "The Locavore Dilemma", where they show that importing a boat-full of food from the tropics proportionally produces less pollution (per ton of food) than local production. It makes sense; since warmer countries have more favorable conditions for farming, they use soil more efficiently. I mean, it would be possible for the U.S. to be "food independent", but that would mean extending agriculture to sterile soil, keeping it from more efficient uses like natural resource extracting or housing.

Of course, freeing trade does have its losers, mainly producers who were protected by tariffs. But once the adjustment period is over, the benefits outweigh the costs by an amazing margin. Think about it: When you spend only $10 on a t-shirt rather than $50, you have more money in your pockets to buy more stuff, but also to put some aside and earn interest, These savings can be used by entrepreneurs who, if successful, will make us even richer.

Just like Milton Friedman for taxes, I'm for the reduction/abolition of any tariff at any time and for any reason. What needs economic protection simply deserves to die, as it shows that it doesn't supply a demand. It creates wastes and makes us poorer in the long run.