Introduction
The 19th century international system was a very significant era of the doctrine and practice of free trade. This key date in the 19th century was 1846, the year England repealed the corn law. The corn laws had protected British aristocrats and farmers from imported corn. Corn at this time was used to make bread. This dispute pitted industrialists and many workers against landowners and farmers. The industrialist wanted cheap corn so that the cost of bread would be lowered and they could reduce or reduce workers wages. This would give their products a competitive advantage in international markets over products from nations where the cost of food and wages were expensive. The workers in Britain also supported this law because they wanted to buy cheap bread. David Ricardo, a stock trader and member of parliament, articulated the liberal theory of comparative advantage which made intellectual case for free trade. Today this theory of comparative advantage has remained the bedrock of arguments for economic integration and free trade. The broad purpose of this paper is to try and answer these questions;
• Does Free Trade Improve or Retard Development in Developing Countries
• Is Free Trade really Free.
Free trade is the trade among two or more countries without any limitations imposed by the governments or other regulators; thus the free movement of goods and services across national frontiers (O’Brien and Williams, 2007 p.139). (Vander .W, 2005 p.24). It points to the liberalisation of the markets of nations through the elimination of tariffs, quotas and other form of restrictions to allow the free flow of products beyond national borders.
Benefits of Free Trade
Trade Openness. Free Trade has remained a fundam...
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After the War of 1812, cheaper British manufactured goods poured into American markets. In order to protect American “infant industries” from British competition, Congress passed a protective tariff in 1816. Proponents of the tariff reasoned that, without some protection, American would always be in the position of supplying raw materials (such as cotton) in ret...
The Corn Laws debate was very controversial during the Industrial Revolution, because at that time there was the transition from what it was the mercantilism era to the liberal ideas and views towards the economy structure. The Corn Laws issue was that it had restricted agricultural imports (Cohn, pp. 7). This law illustrates the conflict between mercantilism and liberal economic ideologies; unlike liberal economic views, the Corn Laws under mercantilism favored the large landowners while being based on power and wealth. Their main goal in mercantilism was to have an economic independence, where their main concern was state’s own interest, instead of cooperating with others, which clearly contrasts liberal economic views such as trade. Mercantilism faded after the repeal of the Corn Laws and allowed liberal economic views to emerge on the international trade scene.
The United States free trade agenda includes policies that seek to eliminate all restrictions and quotas on trade. The advantages of free trade can be seen through domestic markets and the growth of the world economy. T...
Few governments will argue that the exchange of goods and services across international borders is a bad thing. However, the degree to which an international trading system is open may come into contest with a state’s ability to protect its interests. Free trade is often portrayed in a good light, with focus placed on the material benefits. Theoretically, free trade enables a distribution of resources across state lines. A country’s workforce may become more productive as it specializes in products that it has a comparative advantage. Free trade minimizes the chance that a market will have a surplus of one product and not enough of another. Arguably, comparative specialization leads to efficiency and growth.
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While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.
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Free trade is a form of economic policy which allows countries to import and export goods among each other with no government interference. In recent years there has been a general consensus in economist’s stance on free trade. They view free trade as an asset. Free trade allows for an abundance of goods with increased varieties and increased availability. The products become cheaper for consumers and no one company monopolizes an industry. The system of free trade has been highly controversial. While free trade benefits consumers it has the potential to hurt manufacturers and businesses thus creating a debate between supporters of free trade and those with antagonistic positions.
”Free trade policies have created a level of competition in today's open market that engenders continual innovation and leads to better products, better-paying jobs, new markets, and increased savings and investment” (Denise Froning). Though Free trade plays a huge role in the economy today because of what and where it is used. Free trade allows for traders to trade across national boundaries and other countries without government interference. Meaning that traders have very few regulations that allow for them to do this without the government intervening. Free trade makes things for traders much easier and also allows for many more jobs in the US, such as exporting jobs, or jobs in the auto industry and plants. Though there are many other types of trade policies, none give more benefits than that of free trade. Free trade is not determined by artificial prices that may or may not reflect the true environment of supply and demand.
Free trade can be defined as the free access to the market by individuals without any restriction or any trade barriers that can obstruct the trade process such as taxes, tariffs and import quotas. Free trade in its own way unites and brings people together. Most individuals love the concept of free trade because it gives them the ability to move freely and interact with the market. The whole idea of free trade is that it lowers the price of goods and services by promoting competition. Domestic producers will no longer be able to rely on government law and other forms of assistance, including quotas, which essentially force citizens to buy from them.
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