CAN FREE TRADE BETWEEN NATION CAN CREATE PROBLEM ?

                       

Before starting the article it is necessary to understand what actually is free trade. Free trade generally means that a country can export its product to another country without giving any export duty (or import duty for the importer country) or minimum duty. 

Free trade is very helpful in boosting relationship between two nations and can be used for improving the infrastructure and economy. By the help of free trades a nation lure other to export commodities to them. Free trade helps in keeping the final product price low, Ex- if the raw material is brought cheap than the end product will also be cheap. 

So, basically it sounds like free trade are the best way to grow economy and boost international relations but there is always a second face of the coin. Despite having a number of positive figures free trade also has some darker sides.

A nation which is producing a commodity on a large scale will try to sell it to the other nations to earn income, so they make sure that there price should be lower than the commodity which is indigenously produced within the other nation. A nation buying that cheaper material is directly or indirectly influencing the jobs and market of its own citizens that are producing that commodity within the territorial boundaries. Ex- In 1928 the European farms were able to sell the agricultural products to USA at cheaper rate, which took the job of number of farmers in the USA. As a result the Congress passed a bill which imposed tax on the agricultural products imported from European farms. That makes the import costlier and favored the American farmers. 

Free trade agreements are like series of compromise between two nation to keep a balance on tax and to make sure that they have other resources to so that they didn't fall out with the fall out of one nation. Another example is the Free trade agreement between the USA, Canada and Mexico known as North America Free Trade Agreement (NAFTA), it minimizes the taxes to an extent that it became cheaper to buy agricultural product from Mexico which again hurt the favor of American farmers and high number of people lost their jobs. 

Now let us take example from India 2 to 3 days back Japan threaten India to take him to the World Trade Organisation aka WTO ( an organisation that maintains the rules and regulation regarding international trade) as India has increased the tax on steel import from Japan which makes India the 15th largest steel importer from Japan which was 6th in the 2015. Japan is saying that India is violating the rules and regulations were as India has done it so to for the benefit of local mills and is saying that every thing done is under rule.

So the conclusion is that Free trade agreement one side can provide cheap products to the peoples but with the other hand it took jobs of thousands or even millions.