Essay on Free Trade Theory And International Political Economy Discipline

Essay on Free Trade Theory And International Political Economy Discipline

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Free trade theory, in the international political economy discipline, was encouraged in the tenth century by David Ricado, the British political economist, who created the theory of comparative advantage which demonstrates that every state could benefit from trade liberalization by specializing products and services which they are able to make best even if it may be not better than other states (O’Brien and Williams, 2013). Thus, even low income developing countries will also gain benefits from free trade. Liberals also believes that if states are better off and has strong economy it means that the government will have enough money to improve living standards of its population and other national development projects to eliminate poverty and become stable and powerful nations. Sidwell (2008) contends that free trade is the most effective strategy in the world to reduce poverty, hence, developed nations should abolish all of their trade barriers and persuade developing countries to do the same to assist poor developing nations improve their economies and to be better off.
Thus, the first benefits of free trade is every country could export and import goods freely without impediments such as tariffs or limitations since the government are required to open their domestic markets and lay down their role in intervening economic activities. This means developing countries are able to access new broader markets and expand their consumers which increase the number of exports and income. Secondly, developing nations can import technology and goods to improve their productivity for a cheaper price compared to import with high tariffs or attempt to produce domestically through free trade agreements. Thirdly, free trade also bringing capital a...

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...o the economic development. As some developing countries such as India have a rise in their GDP after they opened markets and engaged in international free trade However, there are also some developing countries which cannot achieve economic growth from free trade or even worse off since they cannot compete with developed countries. Meanwhile, developing nations which succeed in improving their economy have to confront with problems from free trade such as inequality. This is because they do not have enough capability and readiness to be involved in highly competitive international free markets but they were forced by developing countries which want to find new markets and consumers for their goods, and gain the benefits from developing countries. As a result, most developing nations are still poor and many of their people have suffered from this unfair trade system.

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