Justifications
Free Trade Agreements help in the elimination of tariffs thus promoting trade among the members. Secondly, Free Trade Agreements contribute towards the lowering of prices of commodities since they contribute towards getting rid of rigid prices. Another justification is that the agreements promote growth in the economic output of the regions in the trading blocs (Amadeo, 2017). In the end, industries in the field of agriculture, machineries and other services such as health care plans and financial services benefit due to the increment in the exports.
Free Trade Agreements lead to creation of jobs in the regions concerned. Another advantage of the Free Trade Agreements is that they lead to increase in foreign exchange among the involved countries. In the end, it promotes other sectors such as manufacturing, banking and insurance sectors as well. Finally, Free Trade agreements lead to the reduction in the spending by the government. This is because every nation’s contracts become accessible to the suppliers available among trading country partners (Amadeo, 2017) . In addition, increment in the competition leads to the lowering of the costs of commodities.
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Cons
Free Trade Agreements lead to major job loss among the member countries especially in the manufacturing sector because of cheap labor. Secondly, the aspect of job migration leads to suppression of the wages among the employees. Finally, Free Trade Agreements render farmers out of business since it allows the governments to subsidize the farm products (Amadeo, 2017) . A good example is the case of US in Mexico which made the local farmers not to be in a position of competing due to low prices.
Reference
Amadeo, K. (2017). 6 Pros and Cons of NAFTA . The Balance . Retrieved 20 April 2017, from https://www.thebalance.com/nafta-pros-and-cons-3970481
