Without free trade, the modern world economy would collapse
- Free trade: economic system in the modern world
- Free trade history
- From the 19th century to the middle of the 21st century
- From 1947 to nowadays
- Free trade authors
- The GATT
- The WTO
- Free trade actors
- Free trade advantages
- Free trade: which are the limits?
- Free trade destroyed full employment
- Free trade can be opposed to the growth of the country
- The economic war between poor and rich countries
- Free trade: is it the best solution?
- Free trade permits the international division of work
- Free trade permits economy of scale
- Free trade permits a larger choice for consumers
Free trade is an economic doctrine which commends free traffic of goods and services between different countries. This theory applies to international levels. The liberal principle according to which we admit we let the market act itself (i.e. we eliminate obstacles and foreign interventions, as well as quotas fixation or customs duties) in order to lead to best possible economic situation.
The world’s economy structure and strategies have evolved a lot since 1950’s. A strong tendency of acceleration of international exchanges has been developing since the end of the 20th century with the recourse of the free trade, the doctrine which encourages the free traffic of people, capital and goods in the form of free trade areas (example: the European Union).
Of course, each country keeps its own autonomy to take decisions concerning custom taxes for the non-members countries of the euro zone. However, if we want to verify the efficiency of free trade it is necessary to measure its effects on economic growth, in other terms, the increase of the Gross Domestic Product during a long period of time.
[...] The buying power of consumers’ raises and so, they can buy more goods and services. This growing demand imposes to raise the production; this once again, strengthens the economy of scale and the possible production prices. This is a virtuous circle between the international free trade and the economic growth. Free trade permits a larger choice for consumers By opening its frontiers to international free trade, a country allows its consumers to reach to foreign goods which are most of the time different from local or national products. [...]
[...] We can now find exotic fruits and vegetable on every market. It’s also the case for automobile market. German, French, Japan or Italian cars haven’t the same characteristic for consumers and free trade permits the consumer to have a larger choice of products. If the free trade didn’t exist, it would be a real social disaster. People always want to have the best product, the one which has the best qualities and therefore the market has to satisfy consumers’ needs. Conclusion To conclude, we can see that free trade generates [...]
[...] Free Trade: Economic system in the modern world Free Trade history From the 19th century to the middle of the 21st century The modern history of the international exchanges starts at the beginning of the 21st century, with the strong reduction of the cost of transports due to the steam engine. This phenomenon has engendered two opposite attitudes from countries which participated to free trade: The wish to sell on the foreign markets in order to promote the economic growth (increase of the agreements of free exchange) The desire to protect as much as possible the local industries from of a foreign competition. [...]
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