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Winners and Losers in the Arguments for Free Trade - Essay Example
Author : lockmancody
Finance & Accounting
Pages 4 (1004 words)
Free trade can be defined as the ability of most countries to either export or import without any regulatory or government restraints. Economists posit the fact that free trade leads to the increase of trade and productivity among countries via decreasing various barriers to trade…
This surge in the flow of services and goods will undoubtedly increase competition that, in turn, will lead to a decrease in the price that consumers have to pay for goods to the traders. When these elements are all combined, most economists are of the belief that global and individual economic growth will be achieved. The comparative advantage theory states that every country will produce goods at which they are extra efficient at production. So long as each country is able to produce goods that give it more comparative advantage, trade becomes mutually beneficial. One argument for free trade is specialization. Through exporting and importing goods, nations come to rely on each other for the production of services and goods at which it might not be too efficient at doing itself (Voituriez and Ekins, 2009, p. 11). When producers and countries are allowed to specialize in production of various services and goods, they attain more efficiency in service and goods production. ...