Question

What are some advantages and disadvantages of free trade agreements for Canada and its citizens? What might be a disadvantage for countries that do not have free trade agreements?

Answer 1

Free trade agreements have advantages such as economic growth and lower prices, but disadvantages include job losses and decreased sovereignty. Countries without free trade agreements may miss out on economic growth and have limited access to foreign markets.

Step-by-step explanation:

Free trade agreements have both advantages and disadvantages for Canada and its citizens. Some advantages include:

1. Economic growth: Free trade agreements open up new markets for Canadian businesses, leading to increased exports and economic growth.
2. Lower prices: Free trade can lead to lower prices for imported goods, benefiting Canadian consumers.
3. Access to resources: Free trade agreements can provide Canada with access to resources that are not available domestically, which can support various industries.

However, there are also disadvantages, such as:

1. Job losses: Free trade can lead to job losses in certain industries that cannot compete with cheaper imports.
2. Decreased sovereignty: Some argue that free trade agreements limit a country's ability to make its own trade policies.
3. Domestic competition: Free trade can increase competition for domestic industries, which may struggle to compete with larger, more established businesses.

For countries that do not have free trade agreements, the disadvantages include missed opportunities for economic growth, limited access to foreign markets, and potentially higher prices for imported goods.

Answer 2

Advantages of Free Trade:

The advocates of free trade put forward the following advantages of free trade:

(a) International Specialization:

Free trade causes international special­isation as it enables the different countries to produce those goods in which they have comparative advantage. International trade enables countries to obtain the advantages of specialisation. First, a great variety of products may be obtained.