Advantages Of Free Trade

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mm One of the central problems of international trade is a debate about the feasibility of, on the one hand, free trade, ie, trade is not limited to any barriers to the movement of goods between the two countries, and on the other -.. to establish such barriers in order to protect national Producers from more competitive foreign suppliers. Supporters of both free trade (free trade) and protectionism put forward a number of arguments in support of their position.
1. The argument of free-trade is based on the general theoretical thesis that thanks to free-trade, based on a comparison of national production costs and transportation of products, the world economy can achieve more rational allocation of resources and a higher standard of living.
The structure of resources and production technology in each country are different, which determines the differentiation in the national costs of production of different resources and products, causing their specialization in the system of the international division of labor on those of them that are less expensive and of higher quality. Hence, any interference in the spontaneously developing commodity exchange between states is economically harmful. In addition, in favor of free trade, the following arguments are advanced:
A) it increases competition in the domestic market of each country at the expense of external suppliers and, accordingly, limits the monopoly of national producers;
B) it stimulates economic activity and NTP of
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