Purpose and content of

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Gains from trade: trade is based on comparative advantages, rather than absolute advantages.
World development:that the world has been evolving towards a more Liberalized global market, reducing proctetionism and creating free trade Areas. It’s not only that tariffs and restrictions Have been reduced, but as well this same fact has led to the “vertical Disintegration” of the production. Nowadays, a products has been “produced” in Several countries. Some parts in China, others in India, assembled in Spain but Designed in Norway.

The idea of globalization with little restrictions to the movement of Goods and money has been celebrated by some and criticized by others. To Certain individuals within a country trade can, indeed, make them worse off.

Think About the farmers who are producing vegetables, if we can import vegetables at Lower rates, what can they do? What are their legitimate expectations? The Country is better off by paying lower prices, but definitely not them. 

World trade without restrictions:-Higher price.-Less Consumer choices.
World trade with restrictions:-Protect National defence and citizens´health.-Protect Against dumping.-Lower Price for the consumers.

Trade Barriers reduce the possible quantity of goods that can be consumed and Produced within an economy. Prices will be higher, and there will be fewer Choices with regards to consumer goods.
Arguments in favor of trade restrictions include: 

  • National Defense - Foreign producers should not be relied Upon for production of defense goods, even if the goods can be produced at A lower cost abroad.
  • Infant Industries - Start-up industries in a country may not Be able to effectively compete against foreign producers because of their Small size. An argument can be made that these industries should be Protected until suitable economies of scale can be achieved. If the Economies of scale are such that the domestic industry achieves a Comparative advantage over foreign companies, the temporary protection Will help to achieve better economic efficiency
Anti-Dumping -  The term dumping is Applied when foreign producers are thought to be selling goods at prices below Their production costs, or below the prices charged in their home market. Retaliatory measures may include the imposition of tariffs, quotas or fines Against foreign producers. The fear is that this "unfair" practice Will drive domestic producers out of business and that the foreign producers Will then impose monopoly pricing. One argument against this fear is that when Prices are raised at a later time, domestic producers can reenter the market. Deliberately driving other producers out by selling at a loss usually does not Work. Another argument against "anti-dumping"is that the country as a Whole benefits when foreign-made goods are sold at lower prices than domestic Ones. 
Elements in the world trade:
GATT:was a multilateral agreement regulating International trade. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the Elimination of preferences.
WTO:is an intergovernmental organization which Regulates international trade.The WTO deals with regulation of trade between Participating countries by providing a framework for negotiating trade Agreements and a dispute resolution process aimed at enforcing participants' Adherence to WTO agreements, which are signed by representatives of member Governments and ratified by their parliaments

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