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.
Nobody downloaded yet

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 paper
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 https://studentshare.org/macro-microeconomics/1430191-discuss-the-advantages-and-disadvantages-of-free
(The Advantages and Disadvantages of Free Trade Essay)
“The Advantages and Disadvantages of Free Trade Essay”, n.d. https://studentshare.org/macro-microeconomics/1430191-discuss-the-advantages-and-disadvantages-of-free.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Worldwide trade.The advantages and disadvantages of free trade and the relative comparisons to fair trade
However, there is a difference between free and fair, corporations finding ways to best exploit the lack of regulation in order to achieve the highest level of profit from the exploitation of resources.
10 Pages(2500 words)Research Paper
Protection or Free Trade for International Trade
Protection or Free Trade for International Trade. The international trade policy of a country with other countries covers mainly import tariffs, import quotas, subsidies to local producers, and other administrative barriers. In a free trade system, the government does not put the importers at a disadvantage compared to the local producers whereas under a protectionist system, the government encourages local producers by having policies that discourage imports by influencing one or more of the levers of trade policy stated above.
4 Pages(1000 words)Essay
Perfect Competition and Monopoly
So the goal of the firm is profit maximisation. We shall study the two types of markets – perfect competition and monopoly, and discuss why in the long run the former earns normal profit but the later earns more than that. Perfect competition is a type of market which fulfils all these five assumptions.
10 Pages(2500 words)Essay
Free Trade and its Benefits
Free trade is an important economic concept these days.The importance of this concept has been enhanced with the development of mediums of transports,development of infrastructure and rapid growth of information technology.It is not alien for people living in the 21st century to get involved in trade with people living in different areas,cities, countries and even other continents.This has also enhanced the scope of the study of free trade.It is very important to determine what free trade means.The practical implications of free trade were not seen by the earlier economists and this topic decorated the pages of text books only.However,with the recent developments many economists have taken th
3 Pages(750 words)Essay
Luxury e-commerce advantages & disadvantages
People living in highly modernized system has adopted many quick influences like e-commerce or luxury business (Okonkwo, 2007). This influence is from globalization which has brought changes in the lifestyle and in people’s buying and selling modes. Luxury is what stands out firm in this modern system; it is something which has centered people in between desires and modernism (Okonkwo, 2007).
9 Pages(2250 words)Essay
Contribution of study to the market segmentation and product differentiation debate
In International trading, a country competes with its competitor on the basis of how the branding is. This is then means that if the product of two named producers is the same, the exception feature that may make one country to sell that the other is the nature of the brand.
4 Pages(1000 words)Essay
Economic Advantages of Free Trade
This essay mainly focuses on the specification of numerous economic advantages, that participation in a free trade area brings to economic development of a country. In a free trade area, member countries abolish all impediments of trade between themselves, but each country maintains its own sets of restrictions on trade with non-member countries
5 Pages(1250 words)Essay
Free Trade
Many people consider free-trade leads to efficiency and their claim can be assessed by seeing the affect of tariff or import tax on imports. Here it must be kept in mind that imposing tariff on international trade is complete opposite of free trade and hence we are going to look what difference does the imposition of tariff poses on the supply and demand.
9 Pages(2250 words)Essay
Trade/Free-Trade Agreements
Quite a substantial portion of especially third world countries' gross domestic product is due to the quantity their international trade affiliations. Throughout time since the origination of bartering from neighbor to neighbor or country to country, there has been a substantial increase over the past few centuries in social, economic and political importance of such trading countries.
3 Pages(750 words)Essay
The World Trade Organization is often accused of benefiting richer nations to the detriment of poorer ones. Discuss both the advantages and disadvantages of joi
The major aim of the WTO is to promote free trade and stimulate economic growth of its member countries. It negotiates and implements new trade agreements among its member countries. WTO has also the responsibility of policing
6 Pages(1500 words)Essay
Let us find you another Essay on topic The Advantages and Disadvantages of Free Trade for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us