Advantages

advantages

1

OVERVIEW
Free trade is a broad term used to denote the unrestricted flow of goods and services across international borders. Countries that do not engage in free trade with other countries often impose tariffs and other penalties on products and raw materials entering the country. Although this is meant to protect domestic production, it results in a burden to businesses, especially small businesses, and makes them less competitive than their international counterparts.
2

EXPANDED MARKETS
One of the most dramatic benefits to small businesses of free trade agreements with other countries is the ability to sell to foreign customers. Trade restrictions often include a clause that requires companies to establish a physical presence in the countries they sell in. This is frequently cost-prohibitive to small businesses that operate out of a single location. Free trade allows them to produce domestically and export to customers in other countries at the same cost as their larger competitors. An expanded market also allows companies to expand their product lines and develop new technologies to meet increased demand.
3

LOWER COSTS OF PRODUCTION
The ability to import raw materials from other countries and to have assembly or other production work done internationally increases the bottom line for small businesses. Companies can take advantage of lower costs of production or enhanced technologies that may not have been available to them in the United States. For example, solar appliance manufacturers can purchase solar cells from Germany, where government incentives have increased innovation and development.
4

WIDER POOL OF TALENT
Free trade agreements often allow for employees to seek employment across borders. This gives small companies opportunities to hire talent from an expanded group of job applicants without having to deal with work visas and other headaches associated with hiring foreign nationals.
5

EXPANDED INSURANCE OPTIONS
Free-trade allows companies to seek insurance solutions from other jurisdictions that may have a lower cost or enhanced features. With the proper cost-effective insurance in place, a company can service more markets and can expand the variety of products and services it offers. For example, a company may not produce jungle gym equipment for children because of the high liability and the inability to secure appropriate insurance coverage in the United States. Having access to foreign insurance markets may allow the company to be properly covered and to expand into that market.

Comments

The US also should use free-trade agreements to open markets. Trade competition advances structural reforms and growth without bigger government and more spending. Although there has been talk about trans-Pacific and trans-Atlantic accords, it has failed to close these much needed free-trade agreements.

Gender equality is not only fair and right--it is smart economics. No economy can reach its potential if it overlooks the talents of half its people. The US should lead in identifying structural barriers in countries that hold back girls' and women's health, education, credit, jobs,and entrepreneurship.