Is free trade always a good policy? Using Paul krugman\'s \"is free trade passé?

Question

Is free trade always a good policy? Using Paul krugman's "is free trade passé?" And bhagwati's paper on labor and environmental standards, comment on the status of US free trade policy. Make sure to add your opinion on NAFTA. In what ways can nafta hurt the US Is free trade always a good policy? Using Paul krugman's "is free trade passé?" And bhagwati's paper on labor and environmental standards, comment on the status of US free trade policy. Make sure to add your opinion on NAFTA. In what ways can nafta hurt the US

Explanation / Answer

Free trade policy

We know that free trade is policy of trade between nations there is no government control for import and export of a product. When the nations are entered in free trade they cannot face any government control such as tarrif, quota,etc.. The main adventages of free trade policy is that if country have no restrictions in the trade they can easily adopt the policy of comparitive adventages.

According to Paul Krugman free trade is not passe. He suggested that free trade is not a good policy for the trade. The best example of free trade policy is NAFTA. We know that NAFTA is North American Free Trade agreement. After the establishment of NAFTA US faced seviour trade deficient between the nations. Also it will created income inequality in the country. And also reduced the real wages of workers, Reduced fringe benefit from the trade.

So i strongly disagree the free trade policy. Here we discussed some disadventages of free trade policy. That is,

1. Free trade will remove the trade barriers, that will caused the structural unemployment in the society.

2. Free trade will diminish the domestic instability in the production.

3. It will increased the foriegn competition

4. Reduced the government revenue from the trade.

5. Infant industry argument: Infant industry faced big competition from the foriegn producers.

6. Increased price war.

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