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

Positive Impacts of Free Trade on Economic Development - Essay Example

Comments (0) Cite this document
Summary
This essay talks about positive influence, which free trade exerts on economic development of participating countries. Free trade can be defined as the cross-boundary exchange of goods and services without government restrictions, taxes and tariffs. Free trade increases competition and efficiency…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.4% of users find it useful
Positive Impacts of Free Trade on Economic Development
Read TextPreview

Extract of sample "Positive Impacts of Free Trade on Economic Development"

Download file to see previous pages Free trade is particularly vital in aligning a country’s economy with the global partners. It is worth noting that countries which had initially centralized their economy lost many years of enormous benefits due to their politically driven isolation from the market economies. Today, they have aspired to tap into the benefits of joining the trading global system. However, active involvements in international trade present potential or associated risks. This is caused by active participation in global markets that are characterized by stiff competition. For instance, a country risks shutting down upcoming industries - those that are less competitive or adaptable - owing to the stiff competition presented by free trade. This is the greatest risk of free trade and has to be looked into carefully before opening up borders for free commerce (Sen., 2004). In addition to this, free trade encourages overdependence on foreign suppliers. This is unacceptable especially when dealing with sensitive supplies or those that play a crucial role in the country’s economy. A good example is supply of food commodities where many nations prefer stabilizing their food security supply so as to avoid crisis in the event of uncertainties such as war or shortage in the supplying nation. Although many countries have opted to have free trade, economists from developing countries argue that newly developed industries ought to be protected until a stage that they are less vulnerable to global competition. Therefore, some governments do so by opting to reduce the amount of imports or prohibit imports at all through trade barriers such as quotas. Additionally, imposing tariffs on imports makes it expensive hence imported...
This paper offers a thorough review of numerous contributions of free trade to the economic development of countries. As it is shown in the essay, free trade contributes positively to economic growth and should be encouraged by all nations.
In the last few decades trade has undergone transformation from the ancient traditional trading with goods for goods to modern exchange of goods and services for cash. Free trade can be defined as the cross boundary exchange of goods and services without government restrictions, taxes and tariffs.
Every nation can find its own place in international labor division. Therefore, every country need to identify their path of supply based on her viable advantages, intensify it and make it the heart of their economic survival and progress. It is important to note that the cost and benefits of global trade is dependent on the magnitude of a nation’s domestic consumption. It is also dependent on the amount of natural resources at its disposal and the ease to tap such resources.
The advantages free trade brings are, as follows. First, free trade encourages the theory of comparative advantage through specialization in goods that can be produced more efficiently. Secondly, reducing tariff barriers encourages development of trade. Thirdly, free trade encourages increased exports which are beneficial for domestic producers. Fourthly, free trade gives countries an opportunity to benefit from economies of scale. Finally, international trade enhances increased completion among nations.

...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Positive Impacts of Free Trade on Economic Development Essay”, n.d.)
Positive Impacts of Free Trade on Economic Development Essay. Retrieved from https://studentshare.org/macro-microeconomics/1491035-positive-impacts-of-free-trade-on-economic-development
(Positive Impacts of Free Trade on Economic Development Essay)
Positive Impacts of Free Trade on Economic Development Essay. https://studentshare.org/macro-microeconomics/1491035-positive-impacts-of-free-trade-on-economic-development.
“Positive Impacts of Free Trade on Economic Development Essay”, n.d. https://studentshare.org/macro-microeconomics/1491035-positive-impacts-of-free-trade-on-economic-development.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Positive Impacts of Free Trade on Economic Development

Free Trade as the Primary Force Driving Economic Development

...?Free trade is the primary force driving economic development. Discuss with reference to both theory and evidence. Essay Plan Interpretation of the question Free trade and its subsequent effects on the economy have been the hotbed of debate for economists in the recent years. The literature published on the effects of free trade has covered in great detail its empirical and theoretical aspects. Despite the fact that the parties on both side of the debate are strong, many of the economists are of the point of view that free trade leads to increased gains for the society. The theoretical literature available assumes certain conditions such as perfect employment which is not seen commonly in the real world. As a result, many...
3 Pages(750 words)Essay

How Free Trade Causes Development

...-liberal program, despite claiming its socialist credentials. If the ideological gates of the authoritarian and highly protectionist China could be broken open for free-market capitalism, then it was only a matter of time and strategy before other power bastions of the world are broken through. And this is precisely what had happened. With the collapse of the Soviet Union in the late 1980s and the shift in policy framework of several developing countries, the nature and complexion of geo-economics has taken a different form. Needless to say, America's position as the sole superpower has been strengthened by this change. The unsavory side-effects of free trade in this period includes “the appearance of a nearly feral form of entrepreneurship...
9 Pages(2250 words)Research Paper

Free trade is the primary force driving economic development

Trade liberalisation has become a focal point of many economic forums across the globe. Globalisation has made it easier for countries to look beyond their own borders for economic growth. Countries have recognised the fact that economic growth is a collective effort and all the countries need to work together on this front. Although many developed countries are still practising protectionism, they have realised the importance of free trade in economic development. Several bilateral agreements and multilateral agreements have been signed by many countries to allow flow of goods amongst the member countries. In most of the cases countries that have participated in free trade agreements have experienced rise in living standards, gro...
11 Pages(2750 words)Essay

Free Trade Zones in UAE and Economic Development

...?Running head: Free Trade Zones in UAE & economic development Free Trade Zones in UAE & economic development A free Trade zone is an area, mostly on airports, seaports or major borders of countries, where goods can be brought in; their form and make up altered to produce other goods, then exported to other countries without the customs authorities of the host countries charging taxes on the goods or be involved in any way. However, the said goods have to be legal goods. Free Trade Zones, abbreviated to FTZ are also known as Foreign-trade zones or exporting Processing zones in some quarters. These zones are usually situated in areas with several advantages to trade like good infrastructure, availability of labor, since they involve a lot...
7 Pages(1750 words)Research Paper

Free Trade Zones in UAE and Economic Development

... reach to other destinations, they become subject to the local custom rules. Ireland was the first country to come up with this idea and the main purpose was to industrialize the rural areas of the country and attract foreign investment to induce the economy and provide better employment to the locals (Davidson, 2008). United States, China, Brazil, Indonesia, India, Malaysia, Philippines and many other countries have various free trade zones, all for the same purpose (Krane, 2009). United Arab Emirates is the recent addition to the list of the countries, which are looking for aggressive economic growth and one of the approaches taken for the same is setting up various free trade zones in order to encourage foreign direct investment (Oxford...
7 Pages(1750 words)Research Paper

Free Trade Zones in UAE and Economic Development

...? Contents Contents 2 Introduction 3 Abu Dhabi Airport Free Zone (ADAFZ) 3 Positive Contributions to the UAE 3 Negative Contributions to the UAE 4 Benefits to Investors 5 Strategies for Growth 5 Dubai Media City Free Zone (DMC) 6 Negative Contributions to the UAE 7 Strategies for Growth 8 UAE Free Trade Zones Employment Rules 9 10 Conclusion 11 References 12 Free Trade Zones in UAE and Economic Development Introduction United Arab Emirates (UAE) has established many Free Trade Zone Areas in order to provide an incentive for businesses to be located in the region. Free trade zones were originally created targeting foreign investors so as to promote foreign trade. They are areas where certain special laws do apply with respect to income...
7 Pages(1750 words)Research Paper

Economic Advantages of Free Trade

This essay presents a brief informative theoretic overview of the positive economic effects, that free trade agreements exert on economic performance of a country.
When country trades with another state, it either exports products to that country or it imports, procures products and services from that particular nation. When a country exports different goods and commodities to other member states, it can be seen that it stands better chances of generating revenue from that particular activity. Exports boost the wealth of the nation and imports also contribute to the welfare of the country. When a country sells certain goods to other countries, it generates revenue in the form of foreign currency and this money can be channelle...
5 Pages(1250 words)Essay

Trade/Free-Trade Agreements

...Engelbrecht Hellen Engelbrecht Academia-Research Paper Academia Order 172265 27 May 2007 Trade/Free Trade Agreements Various countries are involved in international trade amongst one another. There are organizations developed specifically for the negotiations of trade between foreign lands such as the WTO - World Trade Organization. The bartering of goods across international borders or regions between countries constitutes 'International Trade'. 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...
3 Pages(750 words)Essay

The Economic Impact of the Emergence of China and India

The main macroeconomic variable that toys in the global economy’s shift are the emergence of India and China as new superpowers. This emergence certainly has a number of implications, but among the most relevant are: disruption of the equilibrium of the global economy which results in rising demand of goods, giving way to worldwide inflation; the attractiveness of outsourcing to these countries due to low cost but high talent workforce of these countries for cheaper operations.
The growing middle class of China and India results in booming demand for the automobile industry. This increase in demand, with the increasing purchasing power of these countries’ people, is not limited to automobiles but more apparent in...
10 Pages(2500 words)Assignment

The Effect of Democracy on Chinese Development

Any country first needs to go through economic liberalization and political liberalization before finally settling into a stable democratic situation. Democracy should not at any one point be viewed as if it were socialism, but should be seen as a means of promoting economic development through accountability and protection of individual lawful rights and interests...accountability in the sense that the respective leaders are able to fight corruption, enhance social harmony, strengthen public trust and more importantly empower government institutions that are directly in touch with the people (Liu, 2008, p.1-2). Owing to the Chinese well informed and affluent society on top of having a very dynamic economy, the political change wh...
7 Pages(1750 words)Coursework

Potential Benefits of International Trade

.... One of the popular trade bloc is the EU (European Union) and the Association of South East Asian Nations (ASEAN). The trade blocs encourage relations in terms of trading between member countries. To protect these relations they put across barriers of trade to non-member nations. Grant and Vidler (2003) One of the most recent actions by nations with respect to trade barriers is one presented by Washington Post Russian which is the biggest market of automobiles in Europe raised the level of taxes on foreign cars’ Importation. It hit the 35% mark in December 2008. This is due to the recent global economic crises and struggling economies. Global trade leaders had vowed to uphold free trade principles and rid of themselves the trade...
6 Pages(1500 words)Coursework

Marks and Spencer Organizational Development Process

... production and marketing techniques the company is aiming to attain world class position in the retail market field. Along with offering of highest quality products, customer servicing is also ensured by them for attaining loyal customer base. “Our brand values – quality, value, service, innovation and trust – are more important than ever. Our commitment to these values sets us apart from our competitors, and enables us to offer our customers something truly special.” (About us, 2009). An overview of Organizational Development process: According to Richard Beckhard, Organizational Development is “An effort (1) planned (2) organization-wide (3) managed from the top to (4) increase organization effectiveness and health through (5) planned...
7 Pages(1750 words)Case Study

Free Trade

... to import those products which could not be efficiently produced. Thus, there will be a global advantage for all economies to privilege by this economic law of proportional benefit, in the condition, no obstacles for this type of trade. The practice of free trade received its initial impetus in Great Britain with the repeal (1846) of the Corn Laws and the subsequent sweeping tariff reductions under William Gladstone. In order to promote free trade among the fragmented German states, the Zollverein, a customs union, had already been formed (1834). The Anglo-French Treaty of 1860 and later free-trade treaties introduced the concept of most-favored-nation status, which greatly expanded international trade. Emergent nations, though...
8 Pages(2000 words)Research Paper

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages(2000 words)Case Study

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

Cognitive Development in Childhood

The significance of cognitive development among children lies in the fact that the children learn, acquire and develop cognitive and social skills along with other interpersonal skills that help them grow as competent individuals.
This paper addresses the key issues of the development of cognition in children between three to five years. In this context, various theories of cognitive development are discussed briefly along with special reference to the cognitive theory of Piaget. The paper also looks carefully into the relevance of cognitive development during this age upon the development of other areas and skills of the child.
When it comes to the cognitive development of children, the name of Piaget is undoubtedly pri...
7 Pages(1750 words)Assignment

Bernard Madoff : A Scapegoat of the Economic Crisis

Darwin was condemned and treated with contempt by the Church for proposing the theory of evolution that linked all living matter in the earth, including humans. In the case of Bertrand Russell, he was imprisoned as a conscientious objector, for expressing his opposition to British participation in the First World War. These are typical examples of people being wrongfully punished when they were guilty of no crime or fraud or misdoing. It would be highly improper to associate Bernard Madoff with the aforementioned luminaries, for he was truly guilty of carrying out the biggest financial fraud in modern history. At the same time, it would be simplistic to classify him as a victim of the contemporary judicial system. The truth, in fa...
6 Pages(1500 words)Assignment

International Business: World Economic Forum and Davos 2010

...Introduction Globalization, one of the most hotly debated issues means global capitalism to some while others consider it to be the continuation of modernism with the forces of wealth, progress, democracy and happiness at play (Kellner, 2002). Globalization is considered to be beneficial which promotes economic prosperity, cultural diversity and technological advancement. According to the critical social theory, technology and capital work together to create a new globalized and interconnected world. While each force of globalization is important, technological revolution has impacted the business models, value creation and differentiation (Spelman, 2010). The cloud computing technologies that have made the popular social networking...
7 Pages(1750 words)Coursework

Globalization and World Economic Forum at Davos 2010

...Globalization and World Economic Forum at Davos Forces Driving Globalization Globalization has resulted in enhanced interdependencies among thenations of unprecedented scale. This augmented interdependence has caused the dismantling of trade barriers and liberalization of markets. The forces of globalization have impacted the nations, the firms and the individuals alike with the prerequisite of liberalization of trade (Awuah, 2009). The seven forces of globalization are; Markets, Production, Culture, Labor, Technology, Environment and Liberalization. Of these factors, the globalization of markets has engaged substantial attention of the firms and the academia. Some markets are highly globalized, while some are not. The scale of market...
7 Pages(1750 words)Coursework

Free Trade as the Primary Force Driving Economic Development

...Free trade is the primary force driving economic development Introduction Nations have been engaged in doing business with each other in order to getprofits and cultivate their economies and also for the reason that they are not equipped with sufficient resources like territory, workforce, and resources to fulfill all the requirements of citizens of a country. Trading begins when a state has a product which is needed by some other state. Trade provides a chance to states to acquire those items that they are unable to get without difficulty or affordably manufacture themselves. International trade amongst countries increases standard of living inside the countries since resources are used more competently and a larger selection of items...
10 Pages(2500 words)Essay
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 Positive Impacts of Free Trade on Economic Development for FREE!

Contact Us