Within the Discussion Board area, write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.

The importance of trade continues to be a debated topic because the gains are not always quantifiable by those involved. Some would argue that due to a significant difference in wages and regulations, free trade is not always fair trade and that free trade agreements are used by companies to simply chase lower wages and fewer regulations. In the United States, this has been an ongoing debate in regard to both the North American Free Trade Agreement (NAFTA) and the normalized trade relationship with China. Take some time to read the following articles before beginning your post:

• Free Trade vs. Fair Trade
• U.S. Trade Strategy: Free Versus Fair

Based on what you have read, please address the following questions:

• Which do you feel is a better approach, free or fair trade, and why?
• Given the concept of comparative advantage, should we even be discussing free versus fair trade?

Answer preview

Comparative advantage refers to one nation’s ability to produce specific goods at a lower opportunity cost than other potential producers. The theory implies that countries should import products whenever importation guarantees a lower opportunity cost than the production of the same goods. Adhering to principles of comparative advantage ensures that resources are distributed equitably across the market. Comparative advantage removes the sting out of the debate pitting fair trade against free trade because it standardizes the market conditions and reduces the susceptibility of small-scale producers and workers to exploitation.

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