Castillo Essay - Free Trade

Gustavo Castillo

Mr.Gerin

Economics class

08 June 2011

Free trade

Not much is fair about free trade. There is a big difference between Fair Trade and Free Trade. Free Trade means that China and others pay substantially less in taxes to do business in the U.S. than American companies. It means they are free to use the strength of the dollar to close our manufacturing facilities and put millions of workers out of work. They are free to ignore patent and trademark laws and protections. Free trade means that China and others are free to ignore the environment and dump toxins into the water and air which will affect our air and weather and eventually our coasts. In order to gain free trade there will be a price to pay. Even today, the United States continues to support free trade, an example being NAFTA (North America Free Trade Agreement). The problem is that free trade has caused the foreign industry to take over the U.S. marketplace. In my opinion free trade has only hurt the American work force, increased poverty, and added to our national debt. Today there is about 10 million unemployed citizens and 35 million Americans are living in poverty because of free trade. It's clear that the foreign industry is taking advantage of us. You can visit most clothing store and you'll find that most of the clothing's comes from South Korea, China, Hong Kong, Sri Lanka, and the Philippines. On the other hand according to "PreciousMiguel78" "Yes, studies show that free trade is beneficial for every country involved. Free trade benefits all countries that participate in it, and should be encouraged. Protectionist tariffs distort the market and, while a few protected industries may benefit, on the whole, the people of the country suffer. Economists have studied the issue extensively, and concluded that free trade provides an unambiguous economic net gain for the countries involved" (cited from PreciousMiguel78. "Is free trade and economic globalization good for the world?"/ No Date < http://debates.juggle.com/is-free-trade-and-economic-globalization-good-for-the-world>). I disagree and we show you in the following facts.

Free trade is a system of trade policy that allows traders to act and or transact without interference from government. According to the law of comparative advantage the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices are a reflection on true supply and demand. Free trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by artificial prices that may or