Disadvantages Of Trade Liberalization

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Unlike previous years of solely trading goods, the WTO allowed for trade to consist of property and services among different countries. Countries could now be globalized in all goods their country didn’t have through the use of free trade. The process of trading was revolutionized by new developments in technology as more and more countries began to trade.

The current Chief Justice in the United States Supreme Court, John Glover Roberts Jr. was a former U. S. court Appeals for two years before becoming confirmed as Chief Justice in 2005 (“Biographies of Current Justices of the Supreme Court”). Before making his way into the political world, Roberts worked incredibly hard during his years at Harvard Law School. At Harvard College in 1976, Roberts received an A.B. and three years later received his J.D. from Harvard Law (“John Roberts Biography”). Over the years as Chief Justice, Roberts has impacted our country with two landmarked legislative cases. These two cases include, Obama Care and same sex marriage, both having global issues with our country today.

The CUSFTA (Canada - U.S.A. Free Trade Agreement) was established in 1987, officially implemented starting 1988. A few years later it was replaced by the NAFTA (North American Free Trade Agreement) in 1994, which is essentially the same as its predecessor but with Mexico added in. These trade agreements established and modified rules of international trade among the countries of Canada, the United States of America, and Mexico (Krugman & Germic, 2008). Free trade has indeed brought some benefits to the countries involved, greatly raising the amount of trade among all three countries in the years since it’s establishment. However those benefits are

Trade Policy Reforms: Trade Policy Reform liberalised the policy of import substitution mentioned earlier. As a result of which import license was abolished for capital goods & intermediates in 1993. Also govt. of India had adopted a flexible exchange rate in order to deal with balance of payments through exchange rate flexibility. On April 1, 2001 after 10 years the reforms started finally restrictions imports of manufactured products and agricultural products were removed (Ahluwalia*). So, abolishment of import license was the first element of the trade policy, the second element of this strategy was to reduce tariff protection. Average rate of import duty which was 72.5% in 1991-92 had been reduced to 24.6% in 1996-97. But again in next

o An increase in the country’s economy with a shift from secondary to tertiary industry which becomes less dependent on FDI.

During the 20th century economy has changed and international trade has been developped. It allowed to increase our standard of living. Therefore we need to understand why countries have opened their boarder and what the impact is. To do that we need to understantd what the trade bring to us in defining the comparative advantage. After that one important point is to understand which effect the technological change has on trade. Then the main point that it’s whether trade is benefical for everyone or leads to dangerous competitveness and why this behaviour can happen like protectionims and which are the consequences.

With free international trade a lot of jobs will be created in the country, especially in industries of manufacturing and services which can absorb the unemployment that created by restructuring as firms down their workforce.

This paper will discuss the benefits United States (U.S) had by engaging in international trade agreements and how governmental influences benefitted trade. To regulate international trade between nations, international trade agreements exist. These agreements involve regulating imports, exports and international trade of some specialty goods. The United States have been involved in many international trade agreements including free trade agreements. Free trade Agreements (FTA) helps the United States to open up foreign markets for domestic firms. The agreements help to reduce barrier on exports, ease trading across the border, improve economic growth, increase productivity, increase employment opportunities, and boost agriculture exports. There are critical functions associated with multilateral trading systems like World Trade Organization (WTO)/General Agreement on Tariffs and Trade (GATT). Some of those critical functions are resolving disputes efficiently, create a better trading environment, and preserve peace among countries. The initial sections of this paper will discuss the benefits of international trade agreements for exports, imports, jobs, agriculture, and economy.

The authors’ findings let to many set conclusions about trade liberalization and its outcomes. The case study points towards the idea that regional agreements benefit member countries but it diverges

How will increasing level of openness lead to economic growth? Our research shows that openness leads to technological advancement, foreign investment and removal of trade barrier. These factors can all contribute to economic growth. First of all, if a country opens up its door and welcome foreign investors, this is a beginning to future growth. Foreign investors bring in capital and advanced production technology in developed countries. China is a great example of this. Former country chief Deng Xiaoping established a couple of special economic development areas in coastal China cities in 1997. These economic development zones had favorable tax and land policy in order to attract foreign investors. When foreign investors established factories, capital investment and new technology were brought in. Capital investment and advanced manufacture ring technology were

It’s apparent by data presented by Rivera and Oliva (2004) and linked with data available in table 1 that since after the world war policies adopted to ensure unrestricted flow of products and services consequently lead to global competition and innovation which benefits all involved. Krugman (1986) further elaborates that with such trade liberalisation that there are a number of key benefits. Firstly, due to economies of scale enjoyed by nations, economies are able to gain from their comparative advantage. Secondly, there is a rise in intra-industry trade, increasing product differentiation enabling consumer satisfaction to be increased. Finally as Porter (1990) establishes, trade liberalisation ensures nations adopt sound economic policies to increase competitive advantage to ensure foreign investment occurs in their economy.

Trade Liberalization, is defined as “the removal of or reduction in the trade practices that thwart free flow of goods and services from one nation to another”. The liberalization of trade would allow for states to freely trade amongst one another without restrictions. This is different from current trade as states have restrictions and limitations such as only trading with states they have made negotiations which are most likely states that they benefit trading with. Typically, developed states tend to trade with other developed states who can provided resources they do not have access to within their own state. Due to this form of trade, underdeveloped states continue to struggle as they don’t have as much imports and exports as other states. If trade liberalization were to occur, both underdeveloped states and developed states are likely to benefit for different reasonings. Although they are likely to benefit, both underdeveloped states and developed face the chance of not benefiting from free trade.

Globalization builds good relationship between countries as they exchange products. Trade agreements like NAFTA, WTO, EU and ASEAN etc. are done to make the tie stronger and for the ease of trading with each other. It helps to avoid conflicts among countries, promotes understanding and goodwill.

Trade liberalization creates gains for poor and workers in developing countries through an increase in Income and reduction in the prices they pay (Bate, 2007)). Harrison and Hanson mention that openness to trade has has an impact on wages and an increase in employment (Harrison, 1999). Free trade leads to a more economically rational market structure that arise due to economies of scale and scope as in narrow protected and markets that lack competition, leads to certain firms shaping as oligopolies hence leads to inefficient market structure (Helpman. E, 1989).