Disadvantages Of Trade Liberalization

Decent Essays
Part 2
According to world economic globalization, approximately all countries were enthusiastic about trade liberalization, which promised a higher economic growth, development of macroeconomic objectives including trade competitiveness, effective use of resources etc. Trade Liberalization was firstly submitted by Adam Smith in the "Wealth of Nations" (1776) and the first application of the principle was done in England in 1846 (Eddy Lee ,,Trade Liberalization and Employment,,). After that, the benefits of trade liberalization was accepted by all multilateral institutions, namely WTO, IMT, World Bank, OECD etc. As the regulator of the international trade, the major function of WTO is to make the trade issues as easy as possible and encourage
…show more content…
To begin with the benefits of trade liberalization, while country starts to open the country borders for foreign trade with lowering tariffs and import restrictions, basically, the gains from import and export will be rise. Moreover, with the allowance of trading for foreigners who bring with them technology, investment and production skills inside borders of the country, country will achieve to fill up the lack of production skills and increase the amount of manufacturing goods, job opportunities for community, while sometimes foreign firms will benefit only from low labor costs. In the other words, a country will start to earn from comparative advantage as sector specialization and exporting goods while making sectoral transformation due to trade liberalization continuously which is also explained with an expansion of investment on research and development. Additionally, the industrialization degree of the manufacturing will be affected positively by Foreign Direct Investment (FDI) according to the country’s sector of comparative advantage. These processes can cause to make new job opportunities, boost in income per capita, advantages for consumers. All in all, these benefits can be listed as, (Arsalan Hasan,
Get Access