Free Trade Report

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Free trade: For or against?

Muntianu Ioana
Hassan Chaudhry
Anna Dvurechenskaya
Guliza Toran
For centuries economists have sustained free trade as the best free trade policy. Even so, after a more in depth analysis one can notice certain advantages and disadvantages of free trade. This report explains the concept of free trade, the implications of engaging in free trade and the pro and con opinions along with an explication of certain theories related to the concept.

Table of Contents 1. Introduction3 2. Free trade definition3 3. Comparative advantage4 4. Trends4 5. Free trade organizations6 6. Protectionism8 7. Fair trade vs Free trade10 8. Arguments for free trade11 9.
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This requires an introduction of the comparative advantage concept, an economic theory first developed in the 19th century by English economist David Ricardo. 3. Comparative advantage
The theory attributes the cause and benefits of international trade to the differences among countries in the relative opportunity costs of producing the same commodities. In his theory, Ricardo does not see the fact that one country could produce everything more efficiently than another as an argument against free international trade.
In the end no one will remain without something to do. Evolving countries like China that have low wages and therefore lower costs and prices for their products will still leave space for other countries to produce what they have a certain cost advantage in. This will be decided according to the distribution of resources for production around the globe. Some countries may have a natural advantage, by having access to certain natural resources other countries don’t have, or an acquired advantage based on the technology and skills more developed in some countries than others. This way, all countries will sell and buy products at lower costs than if they were to produce themselves. 4. Trends
Trade has become increasingly free in the last 200 years, going through different fazes from trade with colonies to outsourced production nowadays. The volume of trade in this period has risen exponentially.
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