Question

Labour unions in developed countries are usually opposed to free trade. Why might this be the case?

Answer 1

Free trade is a trade policy which do not restrict imports or exports. It is a free market in international trade. Most of the arguments against free trade are given by special interest groups. Labor unions oppose free trade when they believe sometimes correctly, sometimes incorrectly that will make them worse off.

Nearly 80 percent of American favour international trade, labour unions opposes to exciting free trade laws and their explanations. The union mostly fear about the increased competition from non union business that benefit from free trade. So labor will continue its fight to protect jobs and frustrate free trade initiatives. Many arguments given by labour union gives certain amount of economic sense.

The important arguments are:-

• To keep job in developed countries.
• National security is required.
• Other nations unfair treatment of their workers. It is a new argument against imports. It is a tough argument to both document and deflect. Also there is a problem of child labor and forced labor which is highly exploitative. US has funded and contributed to number of efforts to prevent child labor.
• Goods are dumbing from other nations and are not opening their market. This dumbing and protectionism by other nations will put the developed country in disadvantage. Under current laws and trade agreement, dumbing is illegal.

Free trade will be advantageous to advanced countries but not for backward economies. Free trade may ruin domestic industries. Due to free trade imported goods will be available at cheap price. Hence an unfair and cut throat competition will be developed between domestic and foreign industries. As a result domestic industries will be wiped out. Sometimes due to free trade harmful commodities may enter the domestic market.