Are free trade agreements good?

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Yesterday, President Obama announced that the U.S. and South Korea have agreed to a free trade agreement. Many countries have bilateral and multilateral free trade agreements with other nations that they trade with. In North America, Canada, the U.S. and Mexico enjoy NAFTA (North American Free Trade Agreement). There are some people that say this and other free trade agreements are not good for the countries involved, especially the less powerful ones.

The fact is that for the most part this is not true. It is true that there have been instances when small countries were persuaded into joining less than equal trade agreements. For the most part though, free trade agreements are good for all sides. NAFTA as an example is good for all three countries involved. Canada, the U.S. and Mexico all benefit from NAFTA in many ways.

Free trade agreements allow goods to be sold to the other counties in the agreement which increases competition and choice for the consumer. It also reduces the prices of those goods because they no longer have to pay tariffs and additional taxes on these imported items. On the flip side, it allows countries to increase exports which is always a very good thing for any economy. If a small country enters in to a free trade agreement with the United States, that small country can now sell their goods to the largest market on earth and be able to compete due to lower or no importing taxes. This creates jobs and boosts businesses and industries in that small country. It also allows the two countries to share knowledge and cultures which makes both sides smarter and friendlier with one another.

It has been scientifically proven many times that if two countries trade with each other then they are less likely to wage war with one another. In other words, free trade agreements strengthen bonds and reduces wars. The combination of increases in economic activity, more jobs, healthier businesses, more education, stronger bonds and fewer wars makes for an undoubtedly strong argument in favor of free trade agreements. As a rule of thumb, if you hear about a new free trade agreement with a country being discussed, unless it is an unfair one, the results will be good for everyone involved.