Is Free Trade Bad For The Economy?


Throughout the 2016 election, candidates Donald
Trump and Bernie Sanders have had clearly divided and opposing views. But one topic
on which they share their opposition is that of free trade agreements. Many people have
demonized free trade agreements like NAFTA and the TPP in the last year. So, what exactly
are free trade agreements and what’s so bad about them? Well, first it is important to realize that
the world economy, and by extension standards of living, are dependent on international
trade. In practice, countries which produce more usually do better economically, and many
countries enact trade rules which favor their own production. For example, in the 1920s,
European farms were able to sell agricultural goods to the US very cheaply. This undercut
American farmers, and so Congress passed the Smoot-Hawley Tariff, which raised taxes on
imports. This artificially made foreign goods very expensive compared to domestic goods,
now favoring the American farmer. Laws and rules like these are called “protectionist”. Free trade agreements are, at their most basic,
a series of compromises between countries. They remove protectionist restrictions and
taxes, but also work to keep participating economies from falling apart without them.
Most countries are members of the World Trade Organization, which regulates international
trade agreements, and maintains the global economy. But one of the problems with Free Trade Agreements
is that they can also hurt consumers. For example, in 2011, tobacco giant Philip Morris
sued the country of Australia for implementing anti-smoking regulations. The company argued
that the regulations would violate a portion of a 1993 trade agreement between Hong Kong
and Australia because plain packaging would diminish their trademark. And even though
the lawsuit failed to stop restrictions, it is an example of free trade agreement overreach. A much more common complaint, especially in
the United States, is that free trade agreements lead to outsourcing, and a loss of American
jobs. When the North American Free Trade Agreement was established between the US, Canada, and
Mexico in 1994, it eliminated most taxes on imports and exports between those countries.
This made it cheaper to import food and goods from Mexico than it was to grow or make them
in the United States. This led to considerably cheaper goods, and a net benefit for consumers.
However, the trade agreement also led to outsourcing those same farming and manufacturing jobs
to Mexico. It’s been estimated that one million jobs have been lost to NAFTA over
the past two decades. In short, a free trade agreement makes it
easier for foreign countries to compete with local production, making everything less expensive
according to free market principles. But for those workers who actually have to compete
with cheaper foreign labor or resources, they’re often forced to find new work. There are also
a huge number of other considerations besides actual trade that go into free trade agreements,
like environmental and copyright concerns. In the end, free trade agreements can make
goods cheaper and more available. However, this benefit can come at the expense of thousands,
if not millions of jobs. The TPP is one such free trade agreement that
has received major criticism. But what exactly is the big deal? Check out our video to learn
more. Thanks for watching! Make sure to like and subscribe for more TestTube News every
day.

100 Replies to “Is Free Trade Bad For The Economy?”

  1. Without Free Trade we are wasting money protecting jobs that are not competitive and should not be there, making fewer goods at a higher cost to everyone.

    Fighting free trade by spending money to protect jobs that are not profitable is insane in basic economic terms.

  2. Governments spend a lot of time on international trade agreements and almost no time on international tax agreements. WHY?

  3. The jobs don't disappear, they just move. People who think that a person who lives in their country has more right to a job than a person elsewhere, have a quite a narrow world view.

  4. This is clever propaganda. Labeled as "free trade" agreements, they are not really sponsoring free trade. Take a look at the documents… thousands of pages. REALLY free trade would have zero pages. They are legal nightmares designed to satisfy special interests, NOT the welfare of the general populations. Whoever wrote the script for this show did not read the documents, they are only accepting the word of the PTB… lies.

  5. You need to be blind to not see how – in most cases – free trade favors production and investment in cheaper countries with lower wages, less taxes, less environmental regulations, less workers' rights, less strict copyrights rules, … etc.

  6. TPP will cost the US approx, 500,000 jos. The US will raise the cost 6=8 times and hide the money offshore.

  7. I dont care about the economy, but I care about my health, so I dont want to have american food on my dish

  8. Free trade is always bad for the economy. Adam Smith had to invent a new god just to make it work . He called his god "the invisible hand", and guess what: It doesn't exists!

  9. So the summary is. Free trade is good for everyone. Not free trade is only good for a few selfish people in one particular country that's happy to screw over some other, poorer country?

  10. I think that the less developed countries suffered a lot from the free trading ,however,the more developed countries are more beneficial from the free trading.MDC and its multinational companies had more overseas markets to sell their good and reduce their production cost at same time.meanwhile,the LDC enterprises do not strong enough for competition in local market with multinational companies and they will face the "extinct" problems.

  11. I think free trade was good 20 years ago, but lately its turning into screw over your own industries so there's no choice but to import cheap crap from china that breaks before its out of the package. I don't mind having the choice between imported and local products, as long as local produces have a level playing field, but lately its turning into local products being decimated because they cant compete. As a result, I think the standard of living is in danger of going backwards because in order to compete with China, we need to either outsource , lower our wages or work our ass off.

  12. So goods get cheaper across the board; that is equivalent to saying that wages in a given nation have increased, since the purchasing power of their currency has gone up, due to an increase in the supply of commodities; that is a great thing.

    If a monopoly is broken, the goods it dealt in will get cheaper as competition is introduced; the standard of living of the monopolist will also decline, since more competition means less profit. Free trade destroys domestic monopoly. That means lost jobs in certain sectors, and lost profits and lower wages in others.

    But are we to assume that jobs are simply lost due to free trade? Nonsense! It is not as if those people who lost their jobs do not seek out or find newer work; labor, like anything else reallocates based on demand. Free trade enables a country to create jobs in new sectors, and expand older ones in which they still hold a comparative advantage.

    Free trade enables us to move on to newer projects as a nation. This is not only because it frees up labor that was overly concentrated in some sectors of our economy before, but because it provides us with new imported material, equipment, and knowledge that we did not previously have.

    It is a GOOD thing.

  13. free trade may affect farmers but it benefits tech industry. We all know which is more profitable so sorry farmers but you are just victims of progress…on the other side, primary economies get more primary jobs and cheaper tech goods, but it kills any of their incipient and non competitive industry…the problem comes when a developed industrialized economy (USA) makes deals with another industrialized economy which is still growing and has lower production costs (China); because then it lead to the same problem than previously mentioned primary economies: kills industry, only that in this case we talk about very advanced, highly profitable, large employers, heavy Industries that a country may have taken an entire century to build…there is one final benefit that large market countries, such as USA and China, get from free trade; that is political control over smaller countries that rely on them to get income.

  14. free trade is good. it encourages efficient businesses, makes goods more affordable for all, meaning people can have more for less – ie. increased wealth. some countries are better at producing some things than others, so they produce what they are best at and buy from others what they are best at. european nations understood this centuries ago and fought many battles over trade routes. workers in inefficient businesses simply redeploy to efficient businesses and become better paid and richer. nobody loses with free trade.

  15. Protectionist measures & government subsidies only hurt workers & consumers while protecting businesses from competition. True Free Trade agreements don't require treaties, hence why you see international lawsuits regarding breach of Free Trade treaties.

  16. Yah, I am very much pro-free trade an anti-protectionism. I believe Americans should be able to buy from whomever them please without restriction. We should have a completely free-market capitalist economy with no government interference, except of course to protect against basic infringement of individual's rights to their own person/property (murder, rape, theft, fraud, etc.). In the United States, American and foreign providers of goods/services should be free to compete on a level playing field. American's should be free to buy from whomever produces the best quality goods/services at the lowest prices, regardless of whether that provider is American or foreign. The government should stay out of our economy.

  17. I understand that this video is intended for US-based viewers, BUT the same effects that the trade agreements have or may have in the US apply to all other countries as well. It is not just 'taking' jobs from the US and allowing for other countries to sell their products there more easily. It goes both ways. It all felt a bit biased.

  18. it is NOT trade. it is a roadmap to corporate inversions (less tax revenue) and mass job losses as well as worker exploitation in developing countries and environmental destruction. for what benefit? save a few bucks on an 800 dollar iphone? wall st going up for awhile? free trade is an abject failure and cannot be defended…period

  19. Free Trade is bad for the planet because people are always consuming new things instead of repairing old things and taking more from the planet. Were did all the repair shops go, they where good for the economy. not to mention all the money the government makes on tariffs. Free Trade all-so makes over competition.

  20. Americans's don't have to work anymore because technology and the high IQ to work those jobs, free Trade, and mass immigration

  21. Free trade creates wealth, increases choices, saves recourses, and generally promotes Peace. True free trade increase jobs in the export industries, and decreases it in the industries competing with imports. But, that makes the world more efficient in satisfying the needs of consumers.

  22. Competition makes people lose jobs, so what? Go get another job and stop whining about it. Those who are against free trade are against competition. They are the ones who would have made cars illegal in order to save jobs in the HORSE INDUSTRY.

  23. The tobacco company is the best example against free trade? Wow! You can create exemptions and the government shouldn't care if you want to shorten your life., It should be your choice. Maybe spend a little in advertising against things that harm your health or teach in schools., but to force the manufacturer to advertise against his product is ludicrous.

  24. free trade would work if other countrys played by the same rules as everyone else if not ur screwing urself our economy is a connsummer economy we consume more shit then any other economy so other countrys will deal with what ever we tell them to because we are the biggest costumer it's not fair but if u want to be fair you will be poor I don t know why this is a hard consept other then no will explain what type of ecconmy we have and how it works

  25. free trade will always work most of the problems people blame on capitalism was caused from government interfence, if you want a controled economy go live in Korea were the government is your owner

  26. so what makes it to were one company won't be to powerful ,😋… c COMPITION CREATED BY THE FREE FUCKING MARKET, ITS SUPPLUY AND DEMAND GOD DAMN IT

  27. This anti-trade rhetoric is what got Trump elected. Do you think northern states like Wisconsin, Michigan, and Pennsylvania voted for Trump because of racism? Bull shit. They voted for Trump because the Discovery Channel kept spreading fake news about trade. Also, Robert Richt is NOT an economist, he's a lawyer. #SeekerDailyIsFakeNews

  28. Free trade allows for a global market. If America wants to keep corporations then they need to make sure the taxes are low. If they don't, then forget the companies. Protectionism just increases consumer prices and makes companies want to move away. Also the Smoot Hawley tarriff they mentioned deepened the depression terribly and decreased trade. It was considered one of Hoover's greatest mistakes and a very protectionist thing to do.

  29. Free trade is a great thing, it gives us Americans lower prices and helps foreign countries develop their economies, with you want more things made in America then the answer is shrinking the size of government here at home, not protectionism.

  30. can someone tell me if nowthis is a credible, semi unbiased source or just another bullshit channel like vox or buzzfeed whos only objective is to spread bullshit and slander trump

  31. Free trade is a good thing it allows for products to be cheaper for the consumer and helps kickstart smaller economies. Also free trade allows the best to succeed for example the USA makes planes better and faster than other countries just like Thailand and Bangladesh make textiles because they can do it for faster or cheaper. This allows for the consumer to get the best product for the least money.

  32. The best analysis of "free trade" was actually written in the late 19th century by the American political economist Henry George. This book was read into the Congressional Record by a number of Congressmen and mailed to millions of their constituents. Although Henry George championed the ability of people to trade with one another across borders, he warned that the potential benefits of free trade would be significantly reduced because of others laws and taxation policies that protected "rentier" interests (i.e., those who produced nothing but because they controlled land and natural resources were able to charge others "rent" for the mere right of access). Thus, George called for the elimination of all taxation, except for an annual tax on the potential rental value of land (and land-like assets, such as the broadcast spectrum).

  33. The American market is the largest market,and going forward after the demographic collapse of East Asia /Europe,the American market is the only Market that Matters..America first,let's Do what's in Our Interest!!!

  34. We are an agricultural nation there is no reason for our groceries to go up. Also there is no harm in restricting trade with third world nations only. We need to protect our jobs. Free trade with the EU is fine. They have strong unions.

  35. Free Trade? No such thing. The price the working class people have paid is enormous. Lost wages, lost benefits, lost pensions and lost medical coverage. American working class people have paid tremendously for Wall St's crimes. First Reagan's policy of "Trickle Down Economics" I call it trickle on economics. Then Bill Clinton's Right wing deregulation of the banks. Second assault on Americans. Then Bush's criminal wars of profit, forcing Americans to pay for this criminal act. Then Obama's Bailing out the criminals on Wall St. then convicting and punishing the victims of Wall St's crimes. 4 major assaults on "We The People" for the benefit of the super rich. Free Trade is a euphemism for crony capitalism.

  36. The only system in recorded history that has ever pulled the masses out of poverty has been the largely free market that includes free trade. You brought up the hawley smoot tariff yet neglected to note that it is estimated to have elongated the Great Depression by 5 years. Protectionism benefits few at the expense of many. So many people say how many jobs were lost to free trade but it's never stated how prices have gone down and quality gone up. It's also never stated how many jobs are lost or simply not created due to rising costs from protectionist policies.

  37. The cheapest price is not the only consideration. England went "Free Trade" and couldn't feed itself when War broke out. There are things a country should do for itself. Big Agriculture loves "Free Trade" because America has an advantage in that area. But selling agricultural goods does not have the same "value added" that heavy industry does.

  38. Geography test tomorrow. Don’t understand any of the chapter. Resorting to a lot of coffee and many of these videos

  39. Utter stupidity. Protectionists don't understand the concepts of scarcity and abundance. Tariffs create a NET LOSS of jobs.

  40. The Brexit, French riots and Trump's presidency are somewhat related. The common thread is Globalization. Especially the movement of production of goods FROM the countries that consume the goods. Balanced Trade is OK but Free Trade ends with the family wage jobs drained out of the consuming countries.

  41. I'm a 45 year old Mexican and I grew up seeing my parents fight against our protectionist governments from the 70s and 80s. Nowadays the number of Mexicans fleeing to the US has decreased enormously thanks to free trade, not only with the Us but the rest of the world. Free trade is part of human nature. Man, this world is missing Milton Friedman so bad!

  42. This video is ridiculous. You give the same weight of American job losses to consumer gains. That is not at all a dynamic assessment. What efficiency gains for U.S. companies? What about expanded business opportunities for Americans both domestically and abroad. What increased economic efficiency gains and shifted production toward areas where we actually have a comparative advantage!?

  43. Yes Free Trade is bad for a developed economy like the United States, where industries acting in their own interests simply close down factories, plants, production in the US and move them to countries like India, China, Mexico, where the minimal wage is far lower not mention other things like work place insurance, and the numerous other programs that normally you can be covered under through your work place, Fair Trade is good for an developed economy like the United States, where if a production company like GM closes down factories and are opening up factories in Mexico for no other reason but to cut their bottom line, they are punished for doing so.

  44. Sure ain't free trade a great thing when you can 2016 election SLS everything hoard are cash and buy nothing back to give us a huge deficit share their opposition is that a free-trade agreements many people have demonized free trade agreements like NAFTA and the TPP in the last year

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