Free Trade Agreements that allow for the easy flow of goods and services between countries allow stronger trade relationships. Trade agreements that keep all parties happy may lead to more excellent diplomacy between nations.
Healthy diplomatic relationships between countries mean that negotiations can run smoothly. Citizens from the countries involved may benefit equally – greater trust between countries makes doing business abroad much more convenient.
How industries can benefit from FTA
The formation of a strong trust relationship between countries means that links between businesses and people become healthier. Greater trust between people and industries can tell that the cost of doing business may become less.
The presence of a trust relationship also means that business can be conducted in a friendlier manner. This may inevitably lead to a better working environment for employees.
Besides the fact that industries may be able to turn a healthy profit from having beneficial Free Trade Agreements set up, trade agreements between first- and third-world countries may contribute to developing economies’ economic growth.
Struggling economies may benefit significantly from trading with more developed countries. Developing economies may have valuable natural resources like gold or platinum in high demand worldwide.
How citizens can benefit from FTA
The possibility of trade and investment may benefit both large and smaller Australian industries. There are two main ways in which the citizens of a country can benefit from FTAs.
Firstly, investments usually contribute to job creation, which will lower the unemployment rate of a nation. Secondly, with various trading industries, competition is often tight. Healthy competition between industries means that goods and services may be sold at reasonable prices.
The potential downsides of FTAs
Conflict often ensues between countries and their international trade partners. This leads to tough negotiations about trade tariffs or about the kinds of goods and services being traded.
Many political arguments are being brought forward when setting up an agreement between two or more countries (from vastly different cultures and historical backgrounds). At the end of the day, when the dust settles, international trade is a way of life in an increasingly globalised world.