International trade and business: Case study

Thèmes abordés

International trade - International business - free trade - Economic Liberalists

Résumé du document

A free trade system is a market form in which goods and services can be exchanged between and within countries without any kind of government restriction or regulation.
The free trade debate is obviously the most important debate of the 20th century. It has been very much politicized and the community divided itself into two main camps: The Economic Liberalists and the Neo-Mercantilists. To do a very quick statement, one is focusing on a total free trade system and the other wanted to put in place more regulation about trade organization.
The real question is about this organization is : Is free trade going to be beneficial to all or it will be the cause of diseases such as unemployment in developing countries for example. It raises the question of delocalization and everything that goes on with this notion. That is why autarky is facing free trade as liberalism is on opposition with mercantilism.

It is important to emphasis the fact that one or the other (free trade or autarky) is not completely good or completely wrong. It, at first, depends on the situation and can vary from a situation, from a country to an other.

The free trade between firms is in fact a total freedom in matter of regulation or interference by a government. Today, it simply means that international corporations can freely exchange in the all world.

Extraits

[...] Is free trade desirable? 16 Sources: 17 Book 17 E-sources 17 Other 17 I. Introduction A free trade system is a market form in which goods and services can be exchanged between and within countries without any kind of government restriction or regulation. The free trade debate is obviously the most important debate of the 20th century. It has been very much politicized and the community divided itself into two main camps: The Economic Liberalists and the Neo-Mercantilists. To do a very quick statement, one is focusing on a total free trade system and the other wanted to put in place more regulation about trade organization. [...]

[...] Song Chuan, T. (2004) Asia Europe Journal E-sources “Free trade”, “Protectionism”, “Comparative Advantage” in Wikipedia Encyclopaedia Available from: (28/11/07) The web site : (29/11/07) Other US census Bureau; Bureau of Labor Statistics; Bureau of Economic Analysis. [...]

[...] It went up to 65% of the rush in job losses for this same period. The NAFTA is a good example of a showing that free trade leads to job losses : From this state of view we can say that a total free trade is not desirable for the labour. B. Protectionism To limit this effect, many countries put in place a system of regulation by a nation's government in matter of commerce and international trade. In fact, it exists several system of protection. [...]

[...] that is to say, the country A would be gain 1 labour hour on the production of X. As for Nation Y = 2X in matter of labour hours. So, if Y = the nation A will gain 1 labour hour by producing and trading Y against X. Country A would gain 0.5 labour hours by producing Y and importing X instead of producing both products. For the country in matter of labour hours we have: 4 X = 6 Y that is to say 2 X = 3 Y. [...]

[...] To summarize this idea of comparative advantage, we could use this sentence: “Improve and focus on where you are the best (and export it) and do not try to improve your weaknesses (and import 3. HOS Hecksher, Ohlin and Samuelson (H.O.S) speculate about the origin of comparative advantage. To them, a nation will specialize itself into the production of products in which it has a lot of production factors. In other words, the resources they need to produce this good are in abundance. So they will produce and export the product they have factors in abundance and imports the product which they do not have factors of production in abundance. [...]