Free Trade: A Necessary Evil

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“Free trade is a necessary evil”. How far do you agree? Free trade is a branch of economics that proclaims freedom of trade and non-intervention of government in private entrepreneurship. Its main feature is absence of “trade-distorting policies” which reduce imports. The effectiveness of free trade and should countries adopt it to boost economic growth has been a debate since 18th century, after Adam Smith wrote his book “The Wealth of Nations”. There he outlined the main benefits of free trade and showed economic growth possible when adopting free trade policy. This question is still unsolved and some people see free trade as a bad policy. I partially disagree with the opinion that “Free trade is a necessary evil”. To prove my point I would…show more content…
All things above considered, free trade can be seen as evil, as it creates unemployment and political instability. However, it is necessary to state that problems created by free trade policies can be solved with right methods to do so. Investment in education and training facilities can reduce structural unemployment, whereas its elimination will entail a decrease in political protests. The only difficulty is instituting changes that will correct mistakes done by improper governing, which is in the hands of the authorities. Another reason for seeing free trade policies as evil is the new “generation” of protectionists, which have exploited an economically and politically unstable situation to show how good their policy is, when it is the other way around. In most of the cases, protectionism is an undesirable choice, as it destroys more than it builds. If, for example, USA decides to impose a 45% tariff on Chinese goods (considering China is their biggest export market), China will in all likelihood retaliate thus creating economic, social and political tensions between these countries. The result is over 100 million jobs, which were created by China’s exports, can be lost; US’s economy will be pushed at a very low level, as well as a very high risk of…show more content…
This is true of course, but only to some extent. Developing countries are the only countries that should adopt protectionist policies for their own good. This is because, these countries must create industrial capacity and train their citizens, however this is quite difficult to do so. The reason for that is money and time. To improve, investment must be made, however the problem is – how can a country with outdated technology create goods that can match in quality and price with the goods produced developed countries, which have better machinery and labour that is more skilled? There is also the fact that developed countries will not share better technology with “capital-poor countries”. So, in order to enhance industries, developing countries can adopt protectionist policies and therefore buy some time along with keeping foreign-made goods from flooding their markets. The same was done by many rich countries in the 1800s, when they protected their markets and industries with high tariffs until they could produce better goods and compete with European manufacturers. Nonetheless, this is the only way that protectionist policies can help a country more than
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