The Truths of Free Trade The good thing about a free trade area is that it

encourages competition, which consequently increases

Free trade increases prosperity for Americans—and the
a country’s efficiency, in order to be on par with its
citizens of all participating nations—by allowing
competitors. Products and services then become of
consumers to buy more, better-quality products at
better quality without being too expensive.
lower costs. It drives economic growth, enhanced
efficiency, increased innovation, and the greater
fairness that accompanies a rules-based system. These
2. Specialization of countries
benefits increase as overall trade—exports and
imports—increases. When there is tough competition, countries will tend to
produce more products or goods that they are most
Free trade increases access to higher-quality, lower-
efficient at. It is because they take less time to complete
priced goods. Cheaper imports, particularly from
and their output is higher.
countries such as China and Mexico, have eased
inflationary pressure in the United States. Prices are
held down by more than 2 percent for every 1 percent
share in the market by imports from low-income 3. No monopoly
countries like China, which leaves more income for When there is free trade, and the tariffs and quotas are
Americans to spend on other products. eliminated, monopolies are also eliminated because
Free trade means more growth. At least half of US more players can already come in and join the market.
imports are not consumer goods; they are inputs for US-
based producers, according to economists from the
Bureau of Economic Analysis. Freeing trade reduces 4. Lowered prices
imported-input costs, thus reducing businesses’ When there is competition, especially on a global level,
production costs and promoting economic growth. prices will surely go down, allowing consumers to enjoy
Free trade improves efficiency and innovation. Over a higher purchasing power.
time, free trade works with other market processes to
shift workers and resources to more productive uses,
allowing more efficient industries to thrive. The results 5. Increased variety
are higher wages, investment in such things as
With imports becoming easier and cheaper, consumers
infrastructure, and a more dynamic economy that
will gain access to a variety of products that are
continues to create new jobs and opportunities.
inexpensive.
Free trade drives competitiveness. Free trade does
require American businesses and workers to adapt to
the shifting demands of the worldwide marketplace. But
these adjustments are critical to remaining competitive,
and competition is what fuels long-term growth.

Free trade promotes fairness. When everyone follows

the same rules-based system, there is less opportunity
for cronyism, or the ability of participating nations to
skew trade advantages toward favored parties. In the
absence of such a system, bigger and better-connected
industries can more easily acquire unfair advantages,
such as tax and regulatory loopholes, which shield them
from competition.

1. Increased efficiency