How Free Trade Affects the Consumer

Free trade is the economic theory that companies should be allowed to import or export their goods without government intervention.

Cheaper Goods

Countries with the cheapest raw materials and labor produce some goods cheaper than other nations. This allows prices to drop in free-trade markets because only the most-efficient producers will produce some products.

No Extra Costs

Consumers avoid added costs when countries engage in free-trade policies. Transport costs, government tariffs and import fees are not charged on product purchases.

More Choices

Consumer choice is improved through free-trade agreements. More products are added to the marketplace, squeezing out expensive products and inefficient producers.

Better Wages

Companies that produce products under free-trade agreements face fewer penalties regarding tariffs and taxes, allowing higher wages to be paid to employees. Higher wages lead to more discretionary income, giving consumers better purchasing power.

Better Cost of Living

With increased wages and cheaper goods and services, consumers have better cost-of-living conditions. Increased living conditions allow most consumers to improve their wealth through cost savings of cheaper goods and services.

References

• David Ricardo biography
• Benefits of free trade to U.S. consumers
• Free Trade