Free Trade Zone Deficits

There are problems that arise with a trade deal involving free trade zones, such as with the skilled trades coming from the areas within these types of countries. One such criticism is that there are dirty politics afoot. Huge benefits are given to incoming businesses and industries, while domestic industries suffer. This form of corruption in government is forcing smaller industries under, as the larger companies move in to do business.

A secondary problem that arises in a free trade zone surrounds the treatment of workers. Many countries have lax labor laws in comparison to the United States and do not pay a high hourly wage. Companies outsource their labor or relocate to these areas to reap the benefits of paying low wages and no benefits, thus giving them a higher profit margin. These companies take advantage of free trade zones laws and the topic needs to be addressed with that government's economic panel.

Why would a country not want to set up a trade deal in an export processing zone, where they would not have to worry about high tariffs and taxes? They can relocate their factories there and not have to worry about government interference in the form of high taxation. However, when huge industries move out of an area, this leads to a huge deficit in the economy and can lead to a recession. These are but a few of the issues that need to be kept in mind when politicians are discussing free trade with an export processing zone area within a foreign country.

A free trade zone in another country can mean a surge of jobs for that country; but with a price tag. As a consumer, you have to weigh the price of that decision and then decide how best to proceed when it comes time to talk with your state representative or senator. It is important that you stay informed of any economic decisions that your government is making when it comes to a trade deal with foreign countries that may impact your job and economic security.