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Trade policies and agreements - Coggle Diagram
Trade policies and agreements
Free Trade Models
Mercantilism
Comparative Advantage
Advantages and Disadvantages of Free Trade
Lower Global Prices
Unemployment and Business Losses
Rapid Development
Increased Dependency on the Global Market
Free Trade Pros and Cons
Pros
Allows consumers to access the cheapest goods on the world market.
Allows countries with relatively cheap labor or resources to benefit from foreign exports.
Under Ricardo's theory, countries can produce more goods collectively by trading on their respective advantages.
Cons
Competition with foreign exports may cause local unemployment and business failures.
Industries may relocate to jurisdictions with lax regulations, causing environmental damage or abusive labor practices.
Countries may become reliant on the global market for key goods, leaving them at a strategic disadvantage in times of crisis.
Real-World Examples of Free Trade Agreements
U.S. Free Trade Agreements
Public Opinion on Free Trade
The View From Financial Markets