College Papers

Any trade negotiations will end with both winners and losers

Any trade negotiations will end with both winners and losers. Customers benefit from the free trade agreement as they have an extensive and variety access of products at lower prices. Producers in the importing countries suffering losses, as there is a decline in prices that pursues production decrease of existing firms as well as employment and profit. However the aggregate national welfare is found by summarizing all gains and losses to customers, producers and the government.
There are pros and cons to trade agreements. By removing tariffs, they lower prices of imports. consumer’s benefits. But some domestic industries suffer. They can’t compete with countries that have a lower standard of living. As a result, they can go out of business and their employees suffer. Trade agreements often force a trade-off between firms and consumers.


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