The document discusses free trade and protectionism. It argues that while free trade agreements aim to reduce restrictions on trade, they still contain some restrictions requested by participating countries. This limits their potential economic benefits. Government spending policies can also hinder free trade by weakening a country's currency and competitiveness. The document concludes that for free trade to achieve balanced international economies, agreements need priorities balancing trade over any one country's interests and governments must responsibly manage finances.

1. FREE TRADE
Maya Johnson
FMRS 429
May 14, 2015

2. Introduction
A tremendous decrease in economic growth has occurred here in America and
internationally. This growth shrinkage results in many questions concerning the cause.
What has occurred centers on the wonton wastefulness of the consumer. More
specifically, the coined “baby boomers” are considered to begin the trend of
wastefulness because they were the generation immediately after the Great
Depression. As time progressed, this wasteful way of living took a pronounced toll on
the economy. Further, protectionism, a theory that supports the enforcing of tariffs,
duties, and subsidies, rules have been contributed under to topic of economic
exhaustion. Protectionism is understood to place more restrictions on countries
participating in trade. Though intended to balance the market of trade, it negatively
impacted trade. It places, in a sense, too many restrictions on trade agreements.
Pertaining to wasteful consumers, individually making these decisions would be a
plausible course or direction. Collectively, those government officials over protectionism
laws can either change the standards of their laws or allow those who chose the
opportunity to participate in free trade. Cooperative free trade agreements would
exponentially and economically benefit the world. Particularly, free trade would improve
the apparel market because it would allow inordinate amount of benefits to the industry.
For example, those of merchandising would be affected because the amount of jobs
would skyrocket. An increased need for merchandising would be apparent because the
amount of merchandise needed to be regulated would increase even more. Free trade
is a very beneficial approach to trade that is misperceived, but it will only work with
cooperates.

3. REVIEW OF LITERATURE
Origins of Free Trade
The origins of the concept of free trade are associated with the European Union,
where Great Britain decided to acquire an “informal empire” for the purposes of
expanding their empire. It is also a product of the Imperialist versus Anti-Imperialist
dispute (Gallier & Robingson 2013). The success of their empire’s growth was
remarkable and naturally, it enticed restrictions because Anti-imperialists’ were in
disagreement with the imperialist. This negative reaction only provided Great Britain
more motive to counteract their negativity with more expansion. Over the next half
decade, Great Britain had acquired over ten countries within their empire (2013).
Imperialists were understood to strongly agree with the theory of capitalism, the method
of how the United States proceeds to run its government. However, this correlation
leaves many holes in the story given (2013). The European Union and North America
advocate great examples of free trade agreements. These agreements allow countries
to share crops and consumers with no special tax, which potentially lead to boosts in all
of their economies.
Free Trade’s Contribution to Globalization
Modern technology globally illuminates the concept of diversity resulting in it
becoming a blur. It has allocated avenues for a tremendous amount of communication
to the world. Alongside a broader international knowledge base. With this great amount
of understanding and communications, it has brought about more advanced ways of
living. It spirals from the individual to how the world operates. The concept of

4. globalization has become a less farfetched idea in the past two decades more than ever
because of modern technology. It has sped up the process of trade and broadened the
possibilities of what is allowed to be traded.” The concept of comparative advantage
explains international trade in goods and services in which countries export and import
various products (Laffer 2014).”The process of trade caused the growth of many, if not
all, economies, empires, and unions. It increases the level international competition.
North American Free Trade Agreement (NAFTA)
NAFTA is a free trade agreement established between Canada, Mexico, and the
United States. This agreement denotes there are no special taxes shared when trading,
and it has been established for more than twenty years. NAFTA includes three bilateral
agreements, one between each country where it not only includes regulations that
remove quotas and tariffs, but demands each country meet sanitary and phytosanitary
criteria (Zahniser, Angadjivad, Hertz. Kuberka, Santos 2015). These sanitations
regulations are measured strictly based on science to prevent any discriminatory
matters. It also states principles on how those in this agreement treat foreign investors.
This agreement also provides ways to solve disputes about the agreement, as well as
antidumping duty enforcement (2015). It also brought about much success for all three
countries included. All parties benefit from the local resources each provides. It opens
up new territory for sale of their product, while broadening the variety for the consumer.
However, it allocates more competition for the producer, and that may potentially cause
profit loss. Over its life span, NAFTA has caused a continual increase of imports and
exports for Mexico, Canada, and the United States. The imports have risen from under
five percent to over fifteen percent between the U.S. and Mexico, and over twenty

5. percent between the U.S. and Canada. “U.S. agricultural exports to the NAFTA
countries continue to grow, both at the aggregated level and the commodity level for
many products.” The tripled growth of all three NAFTA countries is just one of the many
example of the benefits of Free Trade because it allows fair profit as well as the rule of
law. This allows all to operate in a beneficial realm of fair competition.
Objections to Free Trade
Free trade agreements have been countered by the rules and regulations of the
Protectionism theory, and historically observed, by other parties, as well. “Protectionism:
policy of protecting domestic industries against foreign competition by means of tariffs,
subsidies, import quotas, or other restrictions or handicaps placed on the imports of
foreign competitors (Research Starter, 2014).”This international taxation was rooted
before World War I and has been documented to alleviate citizens from getting out of
paying personal income taxes (Zuchman 2014). This theory also manifested itself in the
European Union when Great Britain favored the Free Trade expansion plan. However,
this theory is not seen very much in the EU. Actually, there are more free trade
agreements than protectionism laws seen in the Western World (Research Starter
2014). To those at a higher level in government, it was a contractual guarantee utilizing
expense money for the economy as well as allowing more potential profit. The United
States has been observed to be a Protectionist country, though it benefits from its free
trade agreement with Canada and Mexico.

6. Discussion
Free trade is a set of principles that, commonly neighboring countries, agree to
disregard all of their product and merchandise taxes when trading with countries within
a written contract. There is a rising misconception obstacle not allowing those in free
trade agreements to reach their full potential is protectionism. It is a common
understanding that this method of trade is there as a relief from taxes within these
agreements. The impression of the agreement is conceived in a positive understanding
by determining the commonality within each. However, Protectionism is not the sole
cause of free trade agreements not reaching their full potential. Restrictions are still
implemented within those contracts of free trade as well as other trade agreements.
If the agreement was in place to prevent countries involved from paying taxes,
why are there still restrictions? There should be a focus on the content of these
agreement before criticizing the content of another theory on trade. More specifically, in
NAFTA, there are restrictions between the United States and Canada on dairy products,
peanuts, peanut butter, cotton, sugar, and sugar-containing products (Zahniser,
Angadjivad, Hertz. Kuberka, Santos 2015). These products are exempt specifically
because of the agreement between the U.S. and Canada in 1989, which are included in
NAFTA (Zahniser, Angadjivad, Hertz. Kuberka, Santos 2015). These restrictions
advanced upon the request of Canada. Canada has also formed a way to prevent free
trade of poultry and dairy products between them and Mexico. If they agree to trade
freely, then they should be just that. All of which correlate to false representation of the
agreement’s title. The restrictions in NAFTA alone exhibits how the agreements
positively affect those within the agreement, but are tremendously flawed and causes

7. much disarray. Dr. Authur B. Laffer explained that the completion of a well-negotiated
Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, free
trade agreements with most of the nations around the Pacific Ocean and the European
Union, respectively, would benefit the United States. These agreements are not clear on
where things are or not to be taxed.
Another agent that causes depreciation in how free trade will reach its full
potential is h the government’s methods of regulating spending. The United States was
previously one of the most powerful countries in the world. Nevertheless, because of
how its government handled spending it has lost that attribute. The American dollar is
losing so much of its value because of the government’s systems. The government’s
spending more than what has been acquired places a great restriction on allowing more
free trade. For example, there are four American dollars to one United Kingdom pound.
Europe would relish in buying from America, but free trade would benefit Europe
because it would cause money loss, and the cost ratio is always chosen to balance
trade. Taxes were implemented originally to place demand on those who are benefitting
from their states’ revenue. Moreover, the government improperly handling its gained
revenue is causing this country to lose competency in trade. This behavior from the
government makes it more difficult for another country to be in agreement to trade freely
with the United States.

8. Conclusion
Free trade agreements benefit economies more than many of the other methods
of trade. These agreements are in place to provide a balanced international economy,
but restriction implemented because one country does not want to contribute as much
as others places barriers on achieving that balanced economy. Free trade agreements
are also often debated because they do not benefit the individual, and the individual is
who controls those elements that go into the trading method. Therefore, it does not
bring collective contentment. This indeed has placed all economies a great imbalance.
When those within agreements prioritizes the balancing of the world first, it would bring
great relief to the incompetency of how the world operates in trade. More trade will lead
to more money, and more money creates more jobs; positivity will continue down the
hierarchy.

9. Works Cited
Zucman, G. (2014). Taxing across borders: Tracking personal wealth and corporate
profits.
Laffer, A. B. (2014). Currency Manipulation and its distortion of free trade.
Gallgher J., Ronald Robinson. (2013). The imperialism of trade.
Zahniser, S., Angadjivad, S. Hertz, T., Kuberka, L., Santos, A. (2014). NAFTA at 20:
North America’s Free-Trade Area and Its Impact on Agriculture.
Research Starter. (2014). Protectionism. Encyclopædia Britannica, September 2014