Free trade agreements are treaties that regulate the tariffs, taxes, and duties that countries impose on their imports and exports
Free trade causes international specialisation. If there were no international trade, many countries would have to go without some products. Thus, Iceland would have no coal, Nepal no oil, Spain no gold and Britain no tea. Moreover, specialization leads to an increase in total production. Besides, free trade will have a great variety of products and increases the world production and the world consumption of internationally traded goods as every trading country produces only the selected goods at lower costs. On account of free trade, the consumers of the different countries get the best quality foreign goods, often of a wider range of choice, at low prices.
On the contrary, free trade sometimes creates rivalry and frictions among the trading nations. In other words, commercial rivalries resulting from trade often lead to war such as trade war between America and China. In addition, if foreign goods are imported freely, the domestic industries of the developing countries would not be able to develop rapidly due to the superior strength of foreign industries.
Free
trade
agreements are treaties that regulate the tariffs, taxes, and duties that
countries
impose on their imports and exports
Free
trade
causes international
specialisation
. If there were no international
trade
,
many
countries
would
have to
go without
some
products.
Thus
, Iceland would have no coal, Nepal no oil, Spain no gold and Britain no tea.
Moreover
,
specialization
leads to an increase in total production.
Besides
,
free
trade
will have a great variety of products and increases the world production and the world consumption of
internationally
traded
goods
as every trading
country
produces
only
the selected
goods
at lower costs. On account of
free
trade
, the consumers of the
different
countries
get
the best quality foreign
goods
,
often
of a wider range of choice, at low prices.
On the contrary
,
free
trade
sometimes
creates rivalry and frictions among the trading nations.
In other words
, commercial rivalries resulting from
trade
often
lead to war such as
trade
war between America and China.
In addition
, if foreign
goods
are imported
freely
, the domestic industries of the developing
countries
would not be able to develop
rapidly
due to the superior strength of foreign industries.