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Grade 9-12
,
Lesson

Free Trade

Updated: August 29 2016,
Author: C3 Teachers

Compelling Question:

In addressing the compelling question “Is free trade worth the price?” students will work through a series of supporting questions, performance tasks, and sources in order to construct an argument with evidence and counterevidence from a variety of sources.

Introduction

Nobel Prize–winning economist Milton Friedman once said, “There is a standard cliché which I am sure you have all heard, that if you have two economists in one room, you are bound to have at least three opinions.” Drawing on disciplinary experts who disagree on a fundamental free-market economic tenet, this inquiry asks students to investigate the dispute over free trade. By considering the arguments of professional economists who may use the same data but come to very different conclusions, students examine the “price” of free trade as it relates to the North American Free Trade Agreement (NAFTA). In understanding the arguments for and against free-trade policy in general and applying such concepts to existing policy more specifically, students can gain clarity about this age-old debate and become participants in a contemporary discussion involving international trade.

NOTE: This inquiry is expected to take five to seven 40-minute class periods. The inquiry time frame could expand if teachers think their students need additional instructional experiences (i.e., supporting questions, formative performance tasks, and featured sources). Teachers are encouraged to adapt the inquiries in order to meet the needs and interests of their particular students. Resources can also be modified as necessary to meet individualized education programs (IEPs) or Section 504 Plans for students with disabilities.

This inquiry was created by C3 Teachers and is also available on the C3 Teachers website. Source: "Free Trade Inquiry", C3 Teachers  , http://www.c3teachers.org/inquiries/free-trade/  , CC BY-NC-SA 4.0

Learning Objectives

  • Participate in a trading simulation in order to understand why people trade and why trade is important
  • List the arguments for and against free trade on a T-chart
  • Write a paragraph detailing three reasons why the United States signed on to NAFTA
  • Develop a claim with evidence about the extent to which NAFTA achieved its goals
  • Construct an argument that addresses the compelling question using specific claims and relevant evidence with information from contemporary sources
     

Process

Students’ arguments likely will vary, but could include any of the following:

  1. Staging the Compelling Question: In order to stage the compelling question “Is free trade worth the price?” students will need to understand why countries trade in the first place. Teachers may want to use the International Monetary Fund/Council for Economic Education’s lesson Why People Trade (Lesson #3: http://www.imf.org/external/np/exr/center/students/hs/think/lesson3.pdf ). In the lesson, students participate in a trading simulation and use this experience to discover the benefits of free trade.
     
  2. Supporting Question 1: The first supporting question—“What are the arguments for free trade?”—asks students to consider the economic consequences of protectionist trade policies including tariffs, quotas, standards, and subsidies. The formative performance task calls on students to list the arguments for free trade by filling in the first half of a T-chart labeled “Arguments for Free Trade.” The featured sources for this task highlight three leading economists—19th century political economist Henry George, Federal Reserve economists Michael Cox and Richard Alm, and Nobel Prize–winning university economist Milton Friedman—each of whom argue for the elimination of trade barriers. Teachers using Featured Source A may want to select among the data tables to focus students’ investigation of the supporting question.
     
  3. Supporting Question 2: For the second supporting question—“What are the arguments against free trade?”—students consider why a government might limit free trade with the imposition of trade barriers. In the formative performance task, students use the second half of the T-chart to list the arguments against free trade, which should enable them to understand the logic behind protectionist policies. The featured sources for this task come from Nobel prize–winning economists Joseph Stiglitz and Paul Krugman and economic-policy analyst Jeff Madrick, who argue that free trade is untenable or, in Krugman’s words, “an idea that has irretrievably lost its innocence.” As students begin to conceptualize the arguments presented before them in the sources from the first two formative performance tasks, they will have developed a framework for considering one of the most hotly debated free-trade policies, the North American Free Trade Agreement (NAFTA).
     
  4. Supporting Question 3: By answering the third supporting question—“Why did the United States sign on to the North American Free Trade Agreement?”—students establish a foundational understanding of NAFTA and what the agreement set out to accomplish. The featured sources in this supporting question are a C-Span video of the press conference that followed the historic, bipartisan signing of the agreement as well as selected remarks by the four United States presidents who attended and supported the law’s passage.
     
  5. Supporting Question 4: The final supporting question—“Has NAFTA achieved its goals?”—invites students to build on their understandings of free trade by evaluating the impact of NAFTA. The formative performance task asks students to construct a claim supported with evidence about the extent to which NAFTA achieved its stated goals. The featured sources for this task are excerpts from a report by the Congressional Budget Office and a collection of short articles broadcast on National Public Radio on the 20-year anniversary of the agreement. Additionally, students should use a recent study by the Pew Research Center, Americans Are of Two Minds on Trade, to help them consider public opinion on free trade.
     
  6. Summative Performance Task: At this point in the inquiry, students have examined the economic arguments for both free trade and protectionist policies in light of the 20-year NAFTA experience. Students should be expected to demonstrate the breadth of their understandings and their abilities to use evidence from multiple sources to support their distinct claims. In this task, students construct an evidence-based argument responding to the compelling question “Is free trade worth the price?” It is important to note that students’ arguments could take a variety of forms, including a detailed outline, poster, or essay.

    • Whether a nation imposes trade restrictions or not, there are opportunity costs of either decision, and it is important to consider those costs.
       
    • Most economists support unregulated trade because, in the end, most people will be better off, and that ought to be the goal of every society.
       
    • Free trade is an unrealistic theory in a global world, so the government should look to regulate it with enlightened protectionist policies.
       
    • When it comes to international trade, nations must look out for themselves, their industries, and their workforce, so if erecting barriers to trade will protect these interests, then a nation should strongly consider it.

Conclusion

See the Summative Performance task above.

Extension Activity

Summative Performance Task Extension:
Students could extend the argument by holding a “fishbowl” debate in which students discuss the question “Should the United States continue NAFTA?”

Taking Informed Action:
Students have the opportunity to Take Informed Action by working as a class to research and understand the fair-trade movement and then assess the extent to which fair trade is present within the “glocal” community. Students can act by organizing a classroom forum that invites business and/or community leaders to discuss whether the country should engage in free trade, fair trade, or both.

  • UNDERSTAND: Research the fair-trade movement and the principles underlying this recent economic initiative.
     
  • ASSESS: Identify businesses or organizations in the community that engage in or promote fair trade and evaluate their foothold in the community.
     
  • ACT: Organize a classroom forum that invites business and/or community leaders to discuss whether the country should engage in free trade, fair trade, or both.

Assessment

Is free trade worth the price? Construct an argument (e.g., detailed outline, poster, essay) that addresses the compelling question using specific claims and relevant evidence with information from contemporary sources.

Subjects:
Economics