Overall, I would agree with the statement that, in the long run, people benefit from free trade. To begin, it is important to mention that there are some short-term drawbacks of free trade such as job losses for workers in import-competing industries. For example, if a country opens its borders to imports from abroad then domestic companies may not be able to compete on price and might go out of business (Bown 2017). In this case the domestic workers in these industries will face layoffs or possibly unemployment.
However, while these disadvantages do exist they tend to be more temporary compared to the benefits that can come from open markets. One key advantage is increased competition which encourages domestic firms to operate more efficiently and innovate new products (Amadeo 2020). This efficiency leads to lower prices for consumers as well as productivity gains which increase worker wages over time. In addition, because open markets create larger overall demand for goods and services countries have an opportunity to specialize in areas where their businesses have an advantage over foreign competitors (Cooley 2016). This specialization increases national income through higher export revenues than what would have been realized without free trade.
Do you agree or disagree with the statement: Opening up free trade does hurt people in import-competing industries in the short run.
Furthermore, increased competition also helps rebalance labor supply by incentivizing workers who’d otherwise stay stuck in a dying industry reallocate themselves elsewhere where opportunities arise due other countries opening up their borders (Grisanti 2018). By doing so workers are better able improve their skills or learn new ones enabling them access higher paying jobs afterwards than before when those same opportunities weren’t available domestically anymore due those particular sectors becoming uncompetitive against imports from abroad.. Such reallocation of labor allows economies adjust accordingly leading ultimately towards full employment especially during periods of economic downturns.