Much of the discussion and debate over free trade agreements stems from determining whether or not they are healthy for the economies and the people living in the countries involved.
You hear about free trade agreements in the news, but do you understand their purpose, advantages, and disadvantages?
Free trade agreements (FTAs) exist between two or more countries for the purpose of controlling restrictions and costs such as taxes, duties, and tariffs which would hinder imports and exports made between the countries involved.
The most commonly discussed FTA is the North American Free Trade Agreement (NAFTA), which first took effect in 1994 and secured virtually free trade between the United States, Canada, and Mexico. Though we mainly hear about only one of these trade agreements, the United States currently has free trade agreements with 20 countries worldwide and is negotiating regional agreements with the European Union and Asia (the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership Agreement, respectively).
Much of the discussion and debate over FTAs stems from determining whether or not they are healthy for the economies and the people living in the countries involved. Like many complex global issues, free trade is not black and white. These agreements often create several benefits, which come at a price. Consider the following advantages and disadvantages of free trade agreements to see how these agreements affect you and the ideals about which you care.
Is There a Simple Solution?
Monitored and enforced by the World Trade Organization, free trade agreements could be better imbued with regulatory language which allows consumers and our economy to benefit from FTAs while ensuring protections against harmful consequences. In the meantime, consumers can look for sustainably sourced products to offset negative effects of free trade. Sustainable sourcing means the product was created with social, environmental, and economically beneficial practices.