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Impact of Free Trade on Consumers - Doc

   

Added on  2021-06-14

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Surname: 1NameInstructor’s nameCourse titleDate Free TradeUnder free trade policy, the government does not meddle with imports and exports through tariffs. However, free trade does not necessarily mean that the government deserts all control and taxation of exports and imports. The theory of free trade is based on the reasoning of Adam Smith. He argued that free trade facilitates the division of labor leading to specialization, better efficiency, and high cumulative production[ CITATION Arn13 \p 58 \l 1033 ]. Impact of Free Trade on ConsumersFree trade presents numerous benefits to the consumers. Foremost, free trade means that consumers have access to a variety of goods. Trade among countries makes consumers have wide access to international market. Therefore, competition among firms increases leading to a broad range of high-quality commodities. The high competition also helps to lower the price of commodities and thus an improvement in the living standards of consumers[ CITATION Arn13 \p 58\l 1033 ]. For the countries that are incapable of generating their own products due to climatic or geographical factors, free trade plays a crucial role in guaranteeing stability in the supply of essential products like food. Impact of Free Trade on ProducersFree trade increases competition as thus poses a threat to local producers. In some cases, the producers might find it difficult to compete with well-established companies and the chances

Surname: 2of being driven out of the business are often high. Despite this, free trade promotes innovation. In the face of stiff competition, firms are encouraged to innovate and create better commodities to retain their market size and also gain new clients. Besides, free trade facilitates the movement of technology from one country to another and producers benefit from technological improvements[ CITATION Joh151 \p 63 \l 1033 ]. As a result, countries experience an increase in economic growth.In summation, free trade should not be condemned to be undesirable. Free trade avails consumers a variety of products at a relatively low price and of high quality. It is as a result of the free trade that companies are encouraged to innovate and also receive technology from overseas market. While this trade is beneficial, the government should put policies in place to protect the interests of both consumers and producers.

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