History of Free Trade Agreements

2106 Words Jan 26th, 2018 8 Pages
People and nations have traded their product from one country to another and many nations have enjoyed the easy way of exchanging of goods and services without restrictions. However, after the world war one Free trade has been crippled due to free trade restrictions called trade protections. Trade protectionism is defined as the use of government regulations to limit the import of goods and services. (Williams kinicki. P 117).One of main trade protectionism is the use of tariffs. Tariffs are form of trade barrier by which government or countries tax on imported goods and services. In America and around the world trade protectionism has been widely used because anti-free trade believes that it will save jobs and stabilized the economy. On the other hand, pro free trade is not considering trade protection as beneficial but rather impairing overall trading atmosphere. In this paper, I would like to talk about the overall disadvantage and disadvantage of free trade has on the economy. The advantages of free trade, are increase production, production efficiency, benefit to consumers, foreign exchange gains, employment, and economic growth. (Edge ken). In free trade countries increase production of goods or commodities in which they have comparative advantage. The theory of comparative advantage was first developed by David Ricardo. According to Ricardo, Comparative advantage is the process by…
Open Document