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  • Benefits and Drawbacks of Free Trade and Protectionism

     

    Eseja4 Ekonomika

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Identifikators:836334
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Publicēts: 12.06.2013.
Valoda: Angļu
Līmenis: Augstskolas
Literatūras saraksts: 3 vienības
Atsauces: Nav
Darba fragmentsAizvērt

Actions to restrict trade with other nations can develop into a "trade war," as nations continually act against each other's goods. In extreme cases, these tensions can escalate into armed conflict.
To sum up, this is a very negotiable topic. There are a lot of opinions about it. Reading information about free trade made me think that almost every positive advantage about it also might have some negative effect. For example, speaking about specialization- every country has comparative advantage and things that it can just do better than others. When there are no barriers to trade, a country is free to concentrate its economic activity on those things, and it can sell those products or services to the rest of the world. BUT the flip side of specializing in certain sectors is a dependence upon those sectors. Everything works well until another country makes a widget just as good. Or, worse, technological innovation means the world suddenly doesn’t need widgets at all. Where such a development may once have harmed one segment of the economy, even a large segment, now it can have catastrophic effects on the entire economy! Another example, competition- it tends to lower prices and increase quality. Rising to a challenge from abroad can strengthen a domestic industry, for example, the arrival of Japanese cars in the 1970s eventually forced U.S. automakers to improve quality. BUT in every competition, there will be winners and losers, what means lost jobs, closed factories and devastated communities and also might mean lower wages and less security for workers. But to conclude, I think that free trade in total is a goal for the states.

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