International Trade Debate Part I Essay

520 words - 3 pages

Objective: Write a 200- to 300-word essay in APA format arguing for or against unrestricted international trade. Some possible platforms on which to write are comparative advantage, gains from trade, World Trade Organization, and trade restrictions. Support your position with three specific reasons.International Trade Debate Part IThe debate over unrestricted international trade is likely to keep economists on their toes. Though there are several advantages and disadvantages to unrestricted international trade, in most cases the advantages do outweigh the disadvantages. Therefore, unrestricted international trade would appear to be more likely to be advantageous to all countries involved.The principle of comparative advantage explains how international trade can be profitable for ...view middle of the document...

When each country specializes in production of goods at lower cost, total production in the economy rises, and each country benefits from international trade through lower cost of goods (Mankiw, N., (2004).It was concluded by Adam Smith that the principals of comparative advantage bring several gains to countries involved in unrestricted international trade (Mankiw, N., (2004). Hence, unrestricted international trade allows for the provision of superior products at lower production and consumer cost in all countries involved. In turn, lower production costs lead to increased competition between countries to improve production standards and increase production performance to maintain competitive prices. Accordingly, each country gains political and economical advantages through unrestricted international trade.Though there are several inadvertent disadvantages to unrestricted international trade, the World Trade Organization (WTO) is positioned to implement trade rules and negotiate fair trade between all countries involved in international trade. The WTO provides a neutral negotiation environment for all members and helps negotiating countries settle any trade disputes that may arise. They handle, preserve and uphold the rules of trade between members by providing the legal ground-rules for international commerce and ensure that all members adhere to WTO policies and agreements between countries. As a result, the WTO help companies, exporters, and importers conduct business, while allowing governments to meet social and environmental objectives (World Trade Organization, 2007).ReferenceMankiw, N. G. (2004). Principles of economics (3rd ed.). Chicago, IL: Thomson South-Western.World Trade Organization (2007). Hot topics. Retrieved February 14, 2008, from http://www.wto.org/english/forums_e/public_forum2007_e/topics_e.htm#governance

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