This, in turn, motivates local businesses to innovate in order to remain competitive in the global market. Free trade generates economic growth. A broader range of business opportunities creates incentives for more investment. Higher investment leads to more and higher-paying jobs both at home and abroad. The economy finds new channels in which to expand, consumption increases, and additional economic growth follows.
Free trade strengthens the rule of law.
Companies doing business in another country rely on the host country's enforcement of their property rights in contractual disputes. Individuals rely on property rights as their living standards rise. Free trade increases prosperity, which indirectly strengthens of the rule of law, since without it neither investment nor higher living standards would endure. Free trade fosters economic freedom. But these benefits of free trade can only last in a fully liberalized economy.