A free trade agreement is unlikely to result in which of the following?

• A. Greater consumer choice
• B. Increased protection for domestic industries
• C. Enhanced competition among firms
• D. Lower prices for imported goods

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of a free trade agreement (FTA). An FTA is designed to reduce or eliminate tariffs, import quotas, and preferences on goods and services traded between member countries, promoting freer trade.
2. Step 2: Analyze the typical effects of an FTA. These usually include greater consumer choice because more foreign goods become available, enhanced competition among firms due to the removal of trade barriers, and lower prices for imported goods as tariffs and costs decrease.
3. Step 3: Consider the impact on domestic industries. Since FTAs reduce trade barriers, domestic industries often face increased competition from foreign firms, which generally reduces the need or justification for protectionist measures like tariffs or subsidies.
4. Step 4: Identify which outcome is unlikely. Increased protection for domestic industries contradicts the purpose of an FTA, as FTAs aim to reduce protectionism rather than increase it.
5. Step 5: Conclude that among the options given, 'Increased protection for domestic industries' is the unlikely result of a free trade agreement.