Free Trade and Job Creation International trade has pros and cons. Economists ge

Question

Free Trade and Job Creation International trade has pros and cons. Economists generally support free trade. International trade has played a significant part in promoting economic development and technology transfer among countries. There are also various arguments in favor of restricting international trade: protecting jobs, defending national security, helping infant industries, preventing unfair competition, and responding to foreign trade restrictions.

1. What is the impact of free trade on domestic job creation policy? Elaborate with examples.

2. What are the impacts of outsourcing and offshoring on trade liberalization (globalization) and economic structure?

3. What are the pros and cons of importing cheap goods and services?

Explanation / Answer

(1) The impact of free trade on domestic job creation policy is increase in the rate of exports from one country to another. It happens due to no-tax at certain free trade areas. It gives rise to more business taking place in such zones. It gives benefit to those companies who perform free trade and thus increases outputs by increasing the labours and employees in its company. It give rise to scope of business as well and rise in job opporturnities.

(2) The impacts of outsourcing on trade liberalization shows in crease in the employment opportunities. It happens due to large demand of employees and workers in the market. It shows the immigration of the employees which can give rise to low-wages workers in the firms. It increases the trade and shows a strong economic structure of the country due to rise in teh business outputs by the workers and rise in effciency.

The impact of offshoring shows relocation of the manufacturing process performing exports across the world. It shows rise in teh economic structure as opporturnities to trade increases as the demand and supply of the products. It leads shill intensive manufacturing where workers are involved to perform the manufacturing process creating efficient outputs.

(3) The pros of importing cheap goods and services is that there is revenues earned at low cost of production. The cons of importing cheap goods and services is that the quality of the product sold is inferior in quality.

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