The paper "The Prospects of Global Economic Development" is an impressive example of a Business essay. The business world is experiencing a tremendous increase in free trade between developing and developed countries. This has been a result of several benefits that are likely to be gained from free trade. Of importance to note, are the losses that may be experienced due to protectionism whether by non-tariff and tariff barriers. Protectionism, as many critics describe it, creates poverty, leads to a decrease in prosperity. In actual fact, it does not protect industries or domestic jobs.
Indeed, it destroys them by harming the export industries and those that rely on imports to manufacture their goods. Free trade is described as a trade whereby the government does not create restrictions on the import and export of goods among different countries. Basically, the government does not impose any discrimination between foreign and national goods. Benefits of free trade The economic theories may be used to explain the benefits of free trade. Comparative advantage theory, coined by David Ricardo, demonstrates that a country may benefit from free trade. Specialization is seen to be possible and to some extent beneficial to a country even when a country lacks absolute advantage in the production of goods.
A country may greatly benefit from free trade if it locates resources on the goods that may be obtained from other countries at a cheaper price and export their goods to other countries. However, a country may only benefit if it trades with other countries that have embraced free trade. As a result of specialization, boosted by free trade, a country is, therefore, able to produce commodities at a lower cost.
Consequently, production efficiency is increased and cost reduction is experienced. This eventually leads to the improvement of the living standard of the people (Jeffery 2004). According to economic theory, there are various benefits likely to be experienced as a result of free trade.
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