Free Trade, NAFTA CAFTA

I will focus on rebuttals and conclusions this round. Rebuttals and Conclusions In the free market, resources are allocated to where they are the most efficient and generate the highest returns. Free trade relies on the law of comparative advantage, and open markets. Competition between producers creates lower prices and greater efficiency. When one nation produces goods more efficiently than another, this leads to greater savings for consumers. Greater savings equals future consumption and investment. Both of these are critical for economic growth. Free trade by lowering prices through competition increases the income of everybody, and is especially important for the poor. They will have greater savings and thus greater incomes, stimulating the economies and job creation of lower income communities. The United States generally has much higher human capital than Mexico. This naturally means that Mexico will have lower costs of living, and thus lower production costs. If Americans purchase goods from Mexico, American consumers get higher incomes and savings. Americans who have higher human capital, will sell skill intensive goods to Mexico, as they are more efficiently produced in America. We will sell skill intensive goods to Mexico, and Mexicans will sell labor intensive goods to us. Both sides will get greater economic efficiency, and jobs will be created where they have the highest return. This equals higher job creation and wages for both sides. It is a mutual benefit. Economists estimated that the effect "on overall employment was positive" due to NAFTA. [1] Why is this? We have lost jobs in areas like auto manufacturing, which have went to Mexico. In return, American consumers have gotten cheaper automobiles from Mexico, and greater incomes. These incomes, and vast new markets available in Mexico, we have had huge job creation in areas like Silicon Valley. It is specialized labor allocated where it has the highest return, which is ultimately best for society. And Con is only focusing on job losses, not new prosperity. As I've said, free trade has led to higher savings for American consumers, which is the same as higher incomes. The amount of additional income due to free trade is again, $2000. [2] Economic growth is extremely important to lower income nations. Free trade helps them out as well. Consider sweatshops. There are simply not enough of them. Since workers have personal sovereignty and are free to choose where they work, they will only take the sweatshop job if it's the best employment option available. Destroying sweatshops does not make workers any better off. It makes them worse off. Consider the case in Vietnam, where Nike makes shoes. Workers are paid $600 a year. This is a low sum, but is is also twice the income of the average Vietnamese worker. [3] Sweatshops thus increase the wages of low income workers. Since Vietnam has a comparative advantage compared to say the US in producing Nike shoes, Vietnam will produce shoes and we will buy them, Vietnam will buy coca-cola products that we make. What is the result? With vast markets for both sides, Vietnam will have sell huge amounts of Nike shoes, going far lengths in improving employment, consumption, increase wages through higher demand of workers, and will also increase reinvestment by businesses. Ultimately, it will cause more market transactions to occur and Vietnam's economy to prosper and grow faster. This type of basis of using sweatshops in low income countries played an important role in the development of Asian economies such as South Korea and Taiwan. [3] Other Rebuttals "the real effects of free trade are stagnation, unemployment and exploitation. Free trade exports middle class jobs in developed countries to poor countries with low wages and minimal labor standards, with states that crack down violently on labor. In turn, developing countries are unable to develop burgeoning industries due to competition with far more developed economies." My opponent's case contradicts itself. Earlier, he said that "the outsourcing of U.S. labor to Mexico [harmed US employment]. Now he says it harms the low income country. Neither assumptions are correct. Free trade does one simple thing -- it increases the amount of market transactions. In free markets, mutual benefit is needed. People are free to choose to engage in any transactions with others (i.e. property rights and consumer sovereignty). People will only engage in transactions if they become better off. Thus, any transaction will make both sides better off. An example, say I buy some bread. I benefit by finding the most affordable bread, and get the product. The producer benefits from having greater revenues. Limiting trade thus limits market transactions. By limiting the amount of transactions in the market, you thus cause less gain and more pain, as fewer transactions can take place that will help people. Point here, limiting trade limits economic growth. My opponent also has his math wrong. Economists almost universally agree that free trade is beneficial. [4] The Smoot Hawley tariff caused US exports to decrease by 66% and unemployment to more than double in the US from about 7% to over 16%. [5] Furthermore, free trade causes in addition to prosperity for both sides, peace. Both sides will be interdepedent, which will dis-incentivize them in going to war, as this would reduce their national resources. Conclusion My opponent has not met his BoP. I have proved that free trade has increased the wealth of Americans, and also through the invisible hand of the market allocates resources where they will generate the highest returns. In other words, efficiency matters, and with free trade, markets are open so that resources flow to their best use and have a comparative advantage. Mexico will produce low skill products, so they will get higher incomes, and the US will produce high skill products, so that we get higher incomes as well. We are both more efficient and have a comparative advantage in these areas. Free trade expands markets, which leads to more economic transactions. Capitalism, which is all about private property and voluntary transactions, has removed more people out of poverty and produced more prosperity than any other system in human history. We can thus tell that market transactions are good, and only will occur if both sides benefit. Free trade allow greater market transactions to occur, which causes greater prosperity. By letting resources flow to where they have a comparative advantage, are used efficiently, and by raising the incomes, wealth, peace, and prosperity of all nations involved in free trade, and because empirical evidence is strongly in favor of free trade, we can tell that it should be protected and enhanced. Vote PRO [1] "Naked Economics", By Charles Wheelan. (137) [2] C. Fred Bergsten, director of the Institute for International Economics, Foreign Affairs (89) [3] "Naked Economics", By Charles Wheelan. (25) [4] http://en.wikipedia.org... [5] http://en.wikipedia.org...