In your responses, comment on at least two of your peers' posts. Critique the arguments made in each peer's article by weighing the costs of FTAs against the benefits. Support your position with sources from the news or the textbook.

Peers

Specialization in trade can benefit both parties if trade is allowed to flow freely without Tariffs or special protection being imposed or afforded to the individual producers. In this simulation the Food trucks were able to benefit from their individual specializations as long as the price of the trade was lower than the opportunity cost of producing the individual components for the trading partners. Both food trucks were able to increase their overall outputs of Combos.

The United States can benefit from specialization and trade by increasing efficiency, creating product diversity, allowing access to larger markets, lowering the price of goods, driving innovation, and improving the overall competitiveness of the economy.

"Free trade increases variety for consumers, allows firms to take advantage of economies of scale, makes markets more competitive, makes the economy more productive, and facilitates the spread of technology." (Mankiw, N. G.)

A recent example of a trade agreement currently in the news is the UK-Australia Free trade agreement, which is likely to be ratified in next couple of months. This trade agreement will increase trade between the two nation by an estimated $12 billion annually. Although Agricultural Unions argue that the agreement would harm their industry, The International Trade Committee announced that the reduction in tariffs will result in lower prices and will benefit consumers. The detractors of the agreement point to short term losses while the supporters argue in favor of long-term benefits. (Neish, S.)

Mankiw, N. G. (2021).Principles of microeconomics(9^th ed.). CENGAGE Learning Custom Publishing.

Neish, S. (2023, March 9). Australia free trade deal could be completed this month. The Drinks Business. Retrieved March 9, 2023, from https://www.thedrinksbusiness.com/2023/03/australia-free-trade-deal-could-be-completed-this-month/