Free Trade and Global Economy

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Introduction

The opportunities of the world trade market are great. In particular, when it is about free trade, people get quite many prospects for the development of their business. Nevertheless, the principle of the unhindered exchange of goods is often called controversial. It is due to several reasons, and there are both advantages and some disadvantages in this system of doing business.

Controversial Phenomenon of Free Trade

Due to the fact that free trade is openly presented in the modern world, certain conclusions can be drawn regarding its effectiveness and usefulness. For example, according to Cacciatore (2014), unemployment can significantly increase in some industries if certain companies cannot compete with the representatives of other countries. It is quite logical since the world market is known to be a platform where competition plays one of the key roles, and the struggle for leading positions is sometimes tough. Also, if it is about free trade, one of the conditions for such a concept is the mandatory strengthening of control over the release and import of licensed products (Fairbrother, 2014).

The fight against illegal content is quite serious in the face of this type of trade, and it can be a plus. Also, a positive feature is a fact that any economy is sure to strengthen due to the influx of investment.

The example of competition in the country of Bangladesh. It experienced some difficulties after the United States, one of its main partners, signed a free trade agreement with the countries of Central America and the Dominican Republic. The fact is that this eastern state had a rather stable business partner, but after America began to work closely with other countries, the economy of Bangladesh began to weaken (Brown, 2016). It is one of the examples of competition in the world market.

Unemployment as the Consequence of the Economy Quality

There is an assumption that in the case of a company’s disability to compete with other enterprises, employees of this firm will inevitably have to leave. As a consequence, it leads to the formation of a hypothesis about the destructive effect of free trade on the economy. However, this phenomenon cannot be considered so categorically as the goal of a mutually beneficial partnership is not only the provision of jobs but also the establishment of business ties.

As Brown (2016) claims, foreign partners can contribute to the strengthening of economic power in a particular country if the interaction is strong enough and successful. Nevertheless, even if active work is conducted in conditions of excessively tough competition, this or that enterprise is likely to experience significant difficulties and, accordingly, will not be able to provide the corresponding number of jobs.

Based on the material studied, it can be noted that the opinion on free trade has changed significantly. Quite a lot of nuances and subtleties of this sphere were opened, and the possibilities became clearer than before. Also, different pros and cons of this principle of economic cooperation have become obvious, and the knowledge that has been gained can be used to work with other sectors of the economy.

Conclusion

Thus, there are both advantages and some disadvantages in the system of free trade, and the modern global economy is largely built on this principle of doing business. This concept is sometimes considered rather controversial, and there are both advantages and disadvantages. The connection between free trade and unemployment is quite evident; however, certain conclusions should be made only according to additional facts and conditions.

References

Brown, R. C. (2016). Promoting labour rights in the global economy: Could the United States’ new model trade and investment frameworks advance international labour standards in Bangladesh? International Labour Review, 155(3), 383-406.

Cacciatore, M. (2014). International trade and macroeconomic dynamics with labor market frictions. Journal of International Economics, 93(1), 17-30.

Fairbrother, M. (2014). Economists, capitalists, and the making of globalization: North American free trade in comparative-historical perspective. American Journal of Sociology, 119(5), 1324-1379.

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