Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

The Advantages and Disadvantages of Free Trade - Essay Example

Comments (0) Cite this document
The Advantages and Disadvantages of Free Trade The dominance of capitalism has become undisputed as other economic systems that once challenged it has seemingly failed to prove themselves as viable and as having the capability of boosting the development of any nation…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.1% of users find it useful
The Advantages and Disadvantages of Free Trade
Read TextPreview

Extract of sample "The Advantages and Disadvantages of Free Trade"

Download file to see previous pages It is also because of free trade that multilateral organizations such as the World Trade Organization, North American Free Trade Agreement, and Asia-Pacific Economic Cooperation were formed. Generally, the aim of these formations is to reduce tariffs and to abolish these ultimately in order to remove barriers to free trade. Globalization itself is an offspring of the free trade concept. The objective of globalization is to remove national borders and to have a world economy that is governed not by states but by the abstract laws of the market. However, free trade has been found to have serious flaws too. It may have advantages but its disadvantages are also just as significant. Because of this, the debate on whether it is really good or bad to the economy of a country has been brought to the fore. One camp insists that free trade brings about economic development that would benefit society while the other asserts that it leads to more serious social inequalities and unfair trading practices. In order to determine whether it is really beneficial or not, it would be necessary to discuss the advantages and the disadvantages of free trade. By doing so, one can weigh the pros and cons and come up with a conclusion as to whether free trade is generally positive or negative. The Advantages of Free Trade One of the very first points that are often raised regarding the advantage of free trade is related to increased production. In order for a country to trade with others, it is compelled to heighten its production of commodities in which it is specialising in. The premise here is that every country has a comparative advantage. David Ricardo explains that “a nation was said to possess comparative advantage in those products for which its labour was relatively productive” (Yoffie 1993: 4). If a country has to exchange goods with another it would be compelled to increase its production to equalize the trade. It is through the increase of production that other benefits and advantages of free trade would follow. Whatever comparative advantage a country may have would be lost though if production is inefficient. One that does not engage in international trade would naturally be less inspired to improve the efficiency of its production. In a world with a free market system though, competition among the traders inevitably becomes intense. Consequently, such competition would prompt the manufacturers or producers not just to enhance the quality of their products but also raise the efficiency of their production. Through better efficiency, more could be produced and less wastage is achieved. If the commodities produced by a particular country are of better quality than those of its competitors, these would gain the advantage in the market. This is obviously good for the economy of the said nation. Improving production efficiency would also prompt technological advances. Apparently, it is only through automation that many types of commodities can be produced in large quantities while raising the level of its quality. With the manufacture of more machines and devices in support of automation, production or the creation of value by a society consequently increases. The two aforementioned advantages of free trade lay the basis for the following other benefits. Free trade is beneficial to the consumers or the buying public in a country that is engaged in it. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“The Advantages and Disadvantages of Free Trade Essay”, n.d.)
Retrieved from
(The Advantages and Disadvantages of Free Trade Essay)
“The Advantages and Disadvantages of Free Trade Essay”, n.d.
  • Cited: 1 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The Advantages and Disadvantages of Free Trade

The Role of the World Trade Organization in Globalization

The protests according to the President of Mexico came from people who were either ignorant of the exact situation despite having a genuine concern and hence were swayed by emotions or by those who had become insecure in their jobs with globalization.
WTO claimed that the first charge was a misconception. It claimed that it opposed measures that use environmental protection as a guide for the protection of domestic industries against foreign competition and not to the measures to protect the environment as the allegations suggested. WTO debated that under its rules, environmental protection measures are prohibited only if those measures treat foreign producers more harshly than domestic producers. It was later found as seen i...
10 Pages(2500 words)Coursework

International Trade Theory

 Further to this, it is also believed that international trade can bring substantial economic welfare to the countries however still most of the countries do not view it as a favorable thing. Despite having a very promising and bright outlook, international trade has been largely viewed with suspension and it is because of this that governments impose barriers to restrict international trade. There can be many reasons behind this act of imposing restrictions or blocking international trade however there are also benefits on the other side too.

International trade has driven the attention of many of the brilliant minds in economics therefore the origins of the economic theory on international trade owe much to the c...
6 Pages(1500 words)Case Study

Air Pollution and Cardiovascular Disease: Bullish Business Long-Run Trade-Off

Increased concentrations of effluents in the air were found to have particularly been emitted from motor vehicle exhausts, industrial factories, and other burning or combustion activities of Australians (Bartnett et al. 2006). Practically, any engine that utilized fossil fuel is known to be emitters of these effluents in addition to other activities that require burning of materials as have been broadly argued by different concerned sectors for the minimization of its usage, as well, finding alternatives which could be biodegradable fuels.

Air is humankind’s natural source of respiratory Oxygen. Its preservation may have been openly disregarded so that the current generation has to face up to the maintenance of it...
12 Pages(3000 words)Term Paper

The Work Breakdown Structure and its Advantages in Project Planning

A typical construction project involves a WBS that evolves from an initial task that is successively subdivided into smaller work blocks until the lowest level is reached, indicating a tree-like structure. Subdividing the project breaks down the project work effort into packages that are both manageable and independent. It connotes that the lowest level of the package corresponds to the smallest project work, which requires the shortest completion time periods. As WBS shows the relationship of all elements of a project, a sound basis for cost and schedule control is provided.

Some lists of project activities involved in WBS include budgeting, cost allocation, time allocation and management, and quality assurance. These...
11 Pages(2750 words)Report

The Trade Union Movement in the UK

Before the ERA 1999, union membership and recognition in the UK were characterized by voluntarism, in which employers and employees could bargain over the terms and conditions of employment without any legal interference. With the statutory system ushered in by the new law, voluntary recognition of unions is no longer allowed and it becomes unlawful for British employers to deny recognition to unions under any circumstances. That conveys the impression that ERA created a radical change in British industrial relations. This paper takes the contrary view, however, and proposes that while the new industrial relations law looks revolutionary in principle, there are no fundamental changes in actuality for the change to qualify as &ldqu...
8 Pages(2000 words)Case Study

Potential Benefits of International Trade

.... Nelson (2000). This is a study set out to make a comprehensive and vivid answer to the question, “Which are the benefits of international trade and why are trade restrictions imposed by countries?” II. The Reason Why Countries Take Part in International Trade The countries ‘comparative advantage’ drives them to participate in international trade. Costs of factors of production and also the relative distribution are the ones that guide the specification of nations. Under oligopolistic business patterns, productions and involvement in trade are the major determinants of the competitiveness of specific firms involved as well as governments. The patterns of exports depend upon the particular governments’ policies and also those...
6 Pages(1500 words)Coursework

Macroeconomics and Trade Policys

Keynes argued that prices and wages do not determine the level of employment, as many classical economists suggested, but instead the level of aggregate demand for goods and services (Case & Fair 683). Keynes realized as well during the Great Depression that the government could intervene in the economy to attain specific employment and output goals by either increasing or decreasing taxes and government spending.

For example, raising taxes will decrease the disposable income of households and thus effectively decreasing consumption. When the government decreases consumption, the household demand for goods and services decreases thus it would only seem reasonable that the amount of output that the economy would also...
7 Pages(1750 words)Article

Free Cash Flows Theory

These are not hard and fast rules in determining the capital structure which should best affect a firms value. These theories lay down the benefits and the costs when a firm chooses what it sees as an adequate mix to maximise the shareholders value.

One of the implications where this research can lead include the possibility of the effectiveness in maximising shareholder value by employing two or more theories in capital structure decisions. Because these theories are more conditional by nature, probing which combinations when used for capital structure decisions are more effective in arriving at the goal of maximising firm value can be another subject for further research.
The role of capital structure in increasi...
11 Pages(2750 words)Case Study

Validating Late Mover Advantages in e-commerce: Evidence from Selected Companies

... to a larger companies’ database. The research will be gather information from both primary and secondary sources: Primary Data Collection The primary data for the proposed research will be gathered using a technique – survey questionnaire. The reasons for selecting survey questionnaire for this purpose are due to its advantages of clear presentation, understanding by respondents and collection of large number of responses in short time. However, it has certain disadvantages as well in terms of the misunderstanding of instructions, incomplete responses, and biasness in responses due to their own motives and intentions at the time of survey. Survey Questionnaire The survey questionnaire will be designed in such a way that it addresses all...
12 Pages(3000 words)Research Proposal

Comparison of the Political Orientation of Trade Unions

Austria or you may call is the Republic of Austria in official terminology is located in Central Europe. Although the population figures do not touch the danger limit but the talent and resources are worthwhile there. Germany and Hungry are also near this region. Italy is in the south of Austria. Switzerland will be seen in the west. So, now you can realize the importance of this region clearly.
The GDP is also impressive here. You can say the economy is strong and it has much depth. The strong social market economy is the result of development and proper management by the government (DArt & Turner 2008). Traders find flexibility in business operations. Labor has a positive approach to work and jobs.
There was a tren...
9 Pages(2250 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic The Advantages and Disadvantages of Free Trade for FREE!

Contact Us