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(Hill 2007) By utilizing of the scarce resources optimally, potential production is greater than it is with restricted trade. (Gilpin 2001) Meanwhile, the New Trade Theory pointed out that free trade could increase the variety of goods available to consumers while the prices of those goods are reduced on average. (Hill 2007)
In addition to these static gains, free trade arrangement also brings dynamics gains in two kinds; both could stimulate economic growth. One is the availability of increased resources such as labour and capital from aboard caused by free trade. For example, between the period of 1989-1994 and the period of 1995-2000, Foreign Direct Investment (FDI) between the NAFTA members tripled...
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