Is free trade desirable?

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. The real question of these organizations is, 'Is free trade going to be beneficial to all or it will be the cause of problems such as unemployment, in developing countries ? It raises the question of delocalization and everything that goes with this notion.

Extraits

[...] In 2007, the major problem that the world is facing in matter of international trade is concerning the exchanges between the USA, the European Union and the Japan. These 3 organizations are in a taught argument about trading. E. Child-working Another point that has to be evocated here is the fact that many developing countries tend to use a child-labour. This case is really present for the clothes manufacturing, but also on many others sectors. According to a moral issue, this is not tolerable but still exists and encouraged by free trade. [...]

[...] We have seen here how economic models can prove that free trade is desirable. B. Benefits from free trade Actually, the model of Smith, Ricardo and HOS are not the only reasons explaining the trade between countries A full access to the market First of all, when you are on the international market, you have access and you can purchase any product that exists in the world. It leads to the law of supply and demand market that increases competitiveness between the countries and the products. [...]

[...] Term of Trade: Imagine, the two countries agree on the fact that X = Y. 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. [...]

[...] Concretely, a total free trade would suppress tariffs for the exports and the imports. It would also let a completely free evolution of the capital and the labour the Human) between the countries and, to finish the intervention of the government to put in place a regulation in order to support the free trade. Nowadays, the situation is that the developed countries have part of their market in a free trade and another part regulated by protectionism. In the mid 20th century, we assist to the emergence of many unions that aim is to agree on a common international trade. [...]

[...] To increase the opportunity cost, it is necessary to amplify the quantities of one commodity that a country should renounce to release just the essential properties to provide each supplementary unit of another product. We talk here about the Marginal rate of transformation. In fact it the value of one product that has to be given up in exchange for an other unit of a second product. To make a parallel to understand the situation let's take an example. Imagine two players in a soccer team. [...]