case for free Trade
THE CASE FOR FREE TRADE BY EGC SEPTEMBER 19, 2002 Free trade can open up markets and provide great opportunities for the future of all countries. Free trade can also enhance an already vibrant economy. But some economists, like Susan Hunt, Kishor Thanawala, and Ward Morehead, argue that freer trade could have a negative impact on economies in other parts of the world. ... The fact is that countries that liberalize trade have grown much faster than those that have remained stuck behind tariffs walls. The paper shows the positive aspects of free trade and how trade restrictions hinder international commerce and investment. First, the paper looks at the advantages of free trade and how free trade stimulates countries’ economies. The paper then looks at the negative impact of trade barriers and how some of the restrictions are merely political rather than the product of economic analysis. Most economists agree that free trade is better than protection, and underlying the idea is the theory of comparative advantage. ... Comparative advantage is the concept that countries should specialize in what countries produce best and then exchanges the fruits of the expertise through trade (Weidenbaum, 1998, 214). Specialization increases global output and is enhanced if countries trade with one another. Aside from direct and measurable aspects, trade stimulates competition, stirs creative energies, rewards individual initiatives, and increases national productivity among nations. Free trade also speeds the exchange of new ideas and technology. Generalizing from historical experience, the advantages of freer trade are numerous. Open trade contributes to lowering inflationary pressures by increasing the supply of goods and services competing for the consumer’s dollar. Thus, the question of free trade is basically a consumer issue. Open trade minimizes the role of government in influencing private sector decisions, thus allowing individuals and business firms to respond to the needs and pressures of the international marketplace.