Arguments against the policy of free trade



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.




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.


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