Sunday, February 28, 2016

Free trade - yay if without pork barrelling

Free trade agreements are a highly divisive issue that regularly come up during political debates. Like in everything, there are losers and winners. According to economic theory free trade should result in cheaper goods and services. These benefits are available to the population as a whole. However certain populations shoulder a bigger burden of the costs, particularly low skilled labor. One of the bigger costs associated with free trade are job losses in certain areas. As showed in one of the optional readings, other costs associated with free trade agreements include public health costs and possibly environmental.

Of course, free trade agreements do not necessarily result in free trade. Due to political pressure, abroad and at home,  certain tariffs and protectionist measures are generally inserted within. Ideally, a free trade agreement would be immune to these political pressures.

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