Disadvantages of free trade

The disadvantages of free trade

1. Harmful to less Developed countries: Competition under free trade is unfair and unhealthy. The less developed countries find it difficult to compete with the economically advanced countries. They cannot protect their infant industries under the policy of free trade. Several Nepalese industries had to close down since they could not face the unequal competition from other countries.
   
   
2. Lead to Dumping: Free trade may lead to cut-throat competition and dumping. Under dumping, goods are sold at very cheap rates and even below their cost of production in order to capture the foreign markets
3. Unrestricted imports of harmful commodities: Under free trade, injurious and harmful products may be produced and traded. It causes irreparable damage to the country.
   
   
4. Economic Dependency: Free Trade increases the economic dependency on other countries for certain essential products such as food, raw materials, etc. Such dependency proves harmful, particularly during war.
   
   
5. Unbalanced Development: Under free trade, international specialization leads to unbalanced development in a country. Only those sectors are developed in which the country has a comparative advantage. Other sectors remain undeveloped. This results in lop-sided development.