Although the merits of free trade are widely accepted by economists and policy makers, criticism of free trade as sound economic policy is still widespread. In both Canada and the United States, critics of free trade attract substantial public attention. Protectionists and economic nationalists argue that free trade causes economic ruin and the loss of national identity.
Most economists would agree that free trade is an essential component of sound economic policy. By exposing national markets to international competition, free trade works to ensure that nations produce goods and services according to their comparative advantage. This encourages an efficient allocation of resources and allows individuals in each country to consume the largest bundle of goods and services.
Although the merits of free trade are widely accepted by economists and policy makers, criticism of free trade as sound economic policy is still widespread. In both Canada and the United States, critics of free trade attract substantial public attention. Protectionists and economic nationalists argue that free trade causes economic ruin and the loss of national identity. According to these critics, the Canada-United States Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA) among Canada, the United States, and Mexico are the source of significant economic hardship in both Canada and the United States. The public finds these claims persuasive because they have considerable emotive appeal and provide an easy explanation for particular economic developments.
