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What are Some Free Trade Benefits?

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  • Written By: Felicia Dye
  • Edited By: Heather Bailey
  • Last Modified Date: 13 October 2017
  • Copyright Protected:
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    Conjecture Corporation
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Free trade refers to the liberty to exchange goods across international borders without government interference. This practice has been the subject of debate for decades. While many make strong arguments opposing such policies, others make strong arguments outlining free trade benefits, such as larger markets, increased competition, and wider availability of goods.

Free trade allows goods and services to flow across international borders without the hindrance of government interference, which are commonly referred to as trade barriers. One of the most commonly outlined free trade benefits, therefore, is bigger markets. If it is easy for suppliers to enter international markets, free trade supporters argue that the suppliers have the opportunity for more growth, more profits, and more job creation.

This leads to the emphasis of how essential these free trade benefits are to poor countries where economic and employment opportunities are generally limited. Without free trade, many suppliers in third world countries may not only be hindered by small markets, but many may not have access to any markets. In places where profits are often minimal and unemployment rates are very high, free trade is often viewed as a life-changing opportunity.

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Increased investment opportunities are another of the free trade benefits that has the potential to drastically benefit poorer countries. In many instances, investors are resistant to injecting resources in small economies when the market potential is limited solely to those economies. However, when there is the potential to receive returns in international markets, investors may be more motivated. This can result in benefits such as better jobs and higher gross domestic product (GDP).

In many democratic societies, it is believed that business without competition is unhealthy. Supporters of free trade tend to argue that markets without a competitive atmosphere are more likely to become riddled with negative aspects, such as monopolies, profiteering, and corruption. Free trade policies facilitate competition by allowing people from various countries with various production methods and business strategies to compete within a single market.

This type of competition is believed to directly benefit consumers. In theory, the lack of free trade could create a situation whereby consumers are at the mercy of markets that could conspire against them or otherwise work against their best interests. However, when foreign entities are allowed to enter those markets, price reduction is often highlighted as a natural result.

Another of the free trade benefits for consumers is the ease of access to goods that may otherwise be unavailable. In many instances, there are demands for goods within a market that either lacks the ability to fulfill part or all of the demand. For example, a country may not have the ability to grow certain produce that is a popular item among its immigrant population. The lack of trade barriers can allow these consumers to readily access the goods they desire.

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