Protectionism and Free Trade
Principles of Economics:
A Discussion on Protectionism and Trade Liberalization
Rich nations make the rules. This comes as no surprise: Since rich people have significant power in their own nations it is to be expected that the rich nations should have analogous power in the world system. Just as surely as rich nations hold the balance of power in the world, it is just as certain that when they use this power it may or may not benefit developing nations. At first such power on the part of the developed nations is likely to seem blatantly unfair. However, the debate about the relative power in the world today between rich and poor nations is more nuanced than that: While wealthy nations may or may not make choices that are most beneficial to developing nations, it is also the case that developing nations can and often do make very poor choices for themselves -- choices that are generally considered to be poor by leaders of both the developed and the developing world.
Leaders in both the developed and developing world debate how international power should be apportioned: Should rich nations (which may be argued to have a high level of expertise) make decisions for poorer nations (which may not have the experience to make good long-term economic decisions) or should poorer nations have the power to make decisions for themselves, even if those decisions are misguided. One of the complexities involved in posing such a question, much less in attempting to answer it, is that implicit in the question itself is the idea that the developed nations have the right to be considered as part of the possible solution to the developing world's economic problems.
Beyond this debate over which nations should have the power to set policy for developing nations is the question of what would be the most appropriate methods for rich nations to use if it is indeed they who are to control the system. The most often used and most highly vaunted system until now is that of trade liberalization, especially when it is conducted through the kind of financial policies as those involving International Monetary Fund (IMF) loan programs. Under current IMF regulations, developing...
Trade blocks remove certain restrictions to trade. Economic blocs help promote free trade. Discrimination against imports nor interference with exports describes free trade policy and the government's role in free trade. The role of the government includes not applying subsidies to exports or tariffs to imports nor quotas. In accordance with the law of comparative advantage, policy allows the trading of partners' mutual gains derived from trade of services and
The level of industrialization of the SEA countries also varies largely but this can be attributed to the difference in the size of the domestic market of each country or region and their overall level of development on the economic front. Singapore and Indonesia have benefitted largely from the creation of the ASEAN since these countries are the larger of the SEA countries. Malaysia has also benefitted as a
Also, the importation of technology from abroad exposes consumers and producers alike to the innovative use of vehicles, such as hybrid technology, that domestic producers can implement even better than the original manufacturer. Innovation is the ultimate driver of new sales and the creator of new markets and new markets means more jobs for workers. Beginning a trade war by setting tariffs or limiting imports through quotas ultimately creates waste
Free Trade Trade is the exchange of goods or services, and international trade is the same when it crosses international borders. Trade across borders traditionally has been subject to trade barriers such as quotas, taxes, tariffs and duties. Modern trade theory rests on two key platforms. The first is Ricardian trade theory, based on comparative advantage, where both parties in a trading arrangement can enjoy a higher net level of trade
However, each stakeholder has its own interests at heart. Those interests in the long-run may be served by freer trade, but in the short-run they are driven more by political considerations. Works Cited Markheim, Daniella & Rield, Brian M. (2007) Farm Subsidies, Free Trade and the Doha Round. The Heritage Foundation. Retrieved December 11, 2008 at http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm Chang, Ha-Joon. (2007). Protectionism...the Truth on a $10 Bill. The Independent. Retrieved December 11, 2008
Free Trade Agreements Are free trade agreements a good policy for nations? Given that there are 200 free trade agreements in place globally, there are clearly benefits, but what are the negatives? This paper explores the positives and negatives of free trade agreements, and this paper delves into the NAFTA pact between the U.S., Canada, and Mexico, for the upsides and downsides of that agreement. What are Free Trade Agreements and why
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