Arguments against the policy of free trade

Advertisement

 

Though free trade is regarded as the most natural form of trade conferring maximum benefits on the countries participating in it, there are several arguments made against it. The prominent amongst them are as follows

 

  1. Harmful to the developing countries

 

A system of free trade gives rise to a competition between different countries of the world. In this competition the developing countries are weaker competitors. They are not able to compete with the developed countries and develop their industries. They always remain backward, agricultural countries

 

  1. Excessive dependence – Undesirable and risky

 

Free trade required that a country should develop only those industries in which it has advantage. It should import all other commodities from other countries thus a country has to depend upon other countries for several commodities. This is alright in normal period but in a period like war if the other country refuses to supply some important commodities the receiving country may face a very difficult situation.

 

  1. Possibility of non priority imports

 

Once a country adopts the policy of free trade and removes restrictions on imports, there is a possibility that some people may take undue advantage of the policy and may import those goods which are on a lower order of priority from the point of the country.

 

  1. Possibility of cut throat competition

 

Under free trade all countries have to compete with each other. It is said that competition is helpful to progress. This is true up to a particular level. If fair competition develops into an unfair and cut throat competition, the developing countries may suffer.

 

  1. Beneficial, if followed uniformly by all countries

 

It is found that some countries follow the free trade policy sincerely but some other countries try to find loopholes in the policy and take undue advantage of those loopholes. In such a situation the countries following the policy honestly would suffer.

 

Conclusion

 

Thus the policy of free trade is no doubt beneficial to all countries in the long run but it can be misused due to which particularly the developing countries may suffer.

 

Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]
8 Comments

Leave a reply

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp
or

Log in with your credentials

or    

Forgot your details?

or

Create Account