Disadvantages of free trade agreement

With free access to the market and market information as well as elimination of trade barriers, supporters say that this is a win-win situation for both traders and consumers. However, not all agree, including some economists, say that free trade allows for foreign competition which can result to Americans losing their jobs, among other things. To have a clearer picture about this contentious issue, here are some key points raised by two opposing groups.

Disadvantages of free trade agreement

It is a treaty made between the United States, Canada and Mexico that went into effect on 1 January Although free trade existed between the US and Canada sincethis new treaty broadened the arrangement.

This agreement was created to eliminate tariff for qualifying products, which could make the prices of exported and imported products significantly high. As for Mexican products exported to the US, companies had to pay an average of percent.

Disadvantages of free trade agreement

Through this treaty, the imbalance in tariffs was addressed by completely phasing it out. In fact, 50 percent of the tariffs were immediately abolished as soon as the agreement was signed and took effect.

Among the areas that NAFTA specifically focused on include accounting, construction, advertising, consulting, architecture, management, healthcare, tourism, engineering and education.

Potential negatives for Australia:

Also, it abolishes licensing requirements and streamlines border processing. In other words, the North American Free Trade Agreement paved the way for businesses coming in and out of Mexico from and into the US to make their lives better. It allows for the establishment of trade standards.

One of the things that three countries agreed to improve was the health, safety and industrial standards to the highest existing standard.

Disadvantages of Free Trade Agreements | Bizfluent

National standards no longer apply as a barrier to free trade. Additionally, agreements were made to ensure that industrialization will not increase pollution, as well as have provisions to manage labor and environmental issues. It ensures protection of intellectual property rights.

This will be especially helpful in fields like chemical production and computer software.

Negative Effects of Free Trade | mtb15.com

Additionally, companies will think twice about stealing intellectual property from other firms. Custom duties are also to be eliminated.

It opens up new opportunities. NAFTA has opened up new opportunities for small-mid-size businesses to establish a name for themselves, whether in the US or in Mexico. This means that smaller firms can finally build and maintain offices in Mexico.

And with the abolishment of tariffs, it has now become less expensive for smaller entities to try their luck in the Latin-speaking nation.

Disadvantages of free trade agreement

It paves the way for real wage increases. According to a Washington Pose article, a study showed that after this treaty was signed, there was a significant increase in wages across the US by 0.

It increases trade between the US, Mexico and Canada.NAFTA stands for North American Free Trade Agreement. It is a treaty made between the United States, Canada and Mexico that went into effect on 1 January Although free trade existed between the US and Canada since , this new treaty broadened the .

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Free trade has several advantages, but many businesses and workers do not share the benefits of the policy. Among the disadvantages of free trade is job outsourcing that results in lost jobs, predatory pricing by foreign companies, increased vulnerability for some domestic industries and and more.

Free Trade Policy: it’s Advantages with Disadvantages | Trade Policies