Every aspect has positive and negative points which are known as Pros and Cons, similarly there are certain advantages and disadvantages of Free Trade Agreement. The main advantage of Free trade agreement is that it enhances the economic growth of a nation. When a country goes ahead with trading, it gets recognition in the world for selling that good to other countries furthermore trading helps the country maintain its foreign reserves in best way possible. Economy grows in a much faster pace when trading is at its boom and this helps a country a lot in pressing down its social problems which include unemployment, illegal immigration and environmental deterioration (Mercurio, 2009).
When Free trade agreement is put into practice, the trading countries manage to secure markets for their exporters. In other words, more leverage is given to exporters other than larger economic giants like European Union. In simple words, free trade agreement assists the countries to trade on their own rather than getting them involved and getting assistance from bigger organizations like European Union.
Free trade agreements provide the industrial and business sector with pool of opportunities and due to FTA; there are massive chances of capital and technology being flown in from one country to another. Trading involves a large segment of goods being transferred from country to country and this result in lot money being flown into the country. For instance, if Sweden trades/sells electronic goods to France then it would benefit Sweden as certain amount of money would be coming in Sweden where as in terms of technology, France would be getting benefits.
A free trade agreement promotes democracy as a lot of discipline and transparency is introduced through trading. When fair and honest deals are made, that gives shape to a better environment which can spread prosperity in the nation. Free trade agreements between various nations can result in better relations and ties between trading nations. Interconnections can make countries understand each other’s needs and collaborate with each other by forgetting conflicts and other issues that might create tense situations. Free trade agreements can assist the trading nations in establishing a proper manufacturing and production units which may boast the process of industrialization in the trading nations.
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