Question

Is free trade fair?  

Answer 1

Let's find out.

For the consumer: For the consumers, free trade is very fare. A free trade agreement allows the price of the commodity to fall. Because the consumers can demand more at a lower price it increases their surplus, standard of living etc. For example, if iPhone is manufactured in the US instead of China the price of iPhone will be very high and many consumers will not be able to afford it. Those who will buy those costly phones will pay a very high amount and this will decrease the demand they will make for other goods.

For producer: It is bad. A producer can produce a soft drink at a price of $10 and after the free trade, the new drinks are available for $5. The producer will be out of business. He will have to become efficient or just try something else.

For the economy: It is very beneficial. A free trade allows the economy to benefit from the comparative advantage in the economy. Employ its sources better and reap an overall benefit by increasing demand in the economy. It gives employment to the abundant resources and increase the benefit to the world and reduce inequality.

Conclusion: Free trades are extremely beneficial and fair because it increases employment, improve efficiency and utilize resources better and increase consumer surplus and their standard of living.