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

Free Trade and its Benefits - Essay Example

Comments (0)
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…
Download full paper
Free Trade and its Benefits
Read TextPreview

Extract of sample
Free Trade and its Benefits

Download file to see previous pages... e study of this subject very seriously. According to Lipsey,International Trade is a transaction and trade of goods and services between two individuals living in different countries,two companies operating in different countries and even two governments indulging in some form of trading activity.International trade becomes Free Trade when there are no taxes, quotas and tariffs are levied to these transactions. International trade becomes controlled trade when taxes and quotas are present in the trade activity involving two parties from different countries.There are certain advantages of Free Trade such as efficiency,improved standard of living and foreign earning.The disadvantages of Free Trade are plenty too.These include government revenue loss, deterioration for local industry and outflow of foreign reserves.It is widely believed that free trade leads to efficiency.This can be explained by a diagram,but we must keep in mind that opposite of free trade is one where the host government charges either tariffs or quotas on imported goods. In the above diagram, it can be seen that free trade is more meritorious to a situation where either no international trade is taking place or where the trade is not free. At first there is no free trade. The market is work at a point where D=S or where demand is equated to supply. The equilibrium quantity of goods traded at this point is represented by “Y”. If the country decided to indulge in free trade then SW will become the supply curve and fewer goods will be traded in the market at point “Y1”. The reason why the quantity of goods traded in the market is reduced is because the imported goods are cheaper and local production of goods has reduced and the gap between Y-Y1 is filled by imported goods. This is a point of controversy and economists who are against Free Trade argue that free trade will lead to closure and downsizing of local businesses resulting in massive unemployment in the country. Under these circumstances Free Trade looks like an evil and it looks a valid claim that imported goods should be stopped from penetrating the local markets. However, the supporters of Free Trade claim that it leads to better utilization of world’s scarce resources. They use the theories of absolute and comparative advantage to justify their claim and recommends that the country should divert from production of goods in which it does not have an absolute and comparative advantage to the good where these advantages can be exploited. However, many countries choose a different route and exploit the benefits of allocative efficiency. They charge some sort of taxes to imported goods or give subsidies to local industries to make sure that local production remains high and local industries are able to compete with the imported goods. This leads to partial improvement in local industries situation, but at the expense of efficiency. Hence, one can see that any trade that is taxed or restricted cannot yield same amount of efficiency as uncontrolled trade. Free Trade also renders certain other advantages too. It leads to an increase in choices that people can make. This is a necessary condition for improvement in living standard of people. Hence, Free Trade allows people to live a better life. Free Trade ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
Free Trade Essay
In the given premise, those goods are now being sold double or triple the price from its point of origin. Due to the cost of it, those imported items are regarded as valuable items. However in present times, where majority of the countries are exercising and adopting free trade, the imported products does have a huge decline on its cost to the extent of being much cheaper than locally produced good.
9 Pages(2250 words)Essay
Tariffs and Free Trade
Tariffs are one of the means of adjusting current account deficits, but they cannot be freely used to adjust the balance of trade as international organizations like World Trade Organization and the International Monetary Fund outlaw their imposition in certain cases.
8 Pages(2000 words)Essay
Free Trade Master Essay
However, Free Trade has been a general recognition of the era. This investigative paper finds the facts and assesses the validity of the newest economic emergence. INTRODUCTION: The word Free Trade implies an unrestricted business opportunities across the globe.
6 Pages(1500 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
Free Trade
In this regard, even though in a sense outward investment involves some transfer of jobs from Canada to a foreign country, it retains market access, which for its part contributes to Canada’s welfare once profit is remitted back to Canada. As a
6 Pages(1500 words)Essay
Free trade or protectionism
The argument between protectionism and free trade is at least three centuries old, almost as old as the concept of free trade. It gave birth to two opposing political ideologies - capitalism and socialism. While
40 Pages(10000 words)Essay
Free trade and its effects on texas as a state and the US as a nation
The basic assumption of the current investigation is that free trade is beneficial to Texas, especially in its relationship to many Latin American countries including Mexico, and that free trade is also beneficial to the US in
3 Pages(750 words)Essay
Free Trade benefit
They argued that if government stays out of trade, then wealth created by private businesses and trade will benefit the public at large. They also said that countries need to specialize
5 Pages(1250 words)Essay
Free Trade
With low import-export restrictions, international trade has increasingly become a revolutionary practice. Today, promoting free trade is a global affair. However, the prospects of free trade are not without a costly side. The
6 Pages(1500 words)Essay
Fair trade has more benefits for suppliers than free trade. To what extent do you agree with this statement
The fair trade mark is being frequently used by organisations in order to provide a guarantee about their products to the customers. The fair trade market is said to be growing in the present times. However, there are various controversies relating to fair trade market. The
5 Pages(1250 words)Essay
Let us find you another Essay on topic Free Trade and its Benefits 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