The paper "Trade Liberalization " is a perfect example of a macro & microeconomic essay. Trade liberalization is an aspect that has gained importance for growing and developing economies as it helps to boost economic growth. This paper looks at evaluating whether trade liberalization is important for economic growth and development. The process of trade liberalization started in the 1980s and gained prominence in the 1990s as economies all around the globe started to give importance to trade liberalization so that better growth rates can be achieved. It was seen that economies who didn’ t adopt the process of trade liberalization faced difficulties in trade and were not able to witness growth which resulted in different economies moving away from the traditional mechanism and adopted the process of trade liberalization. It is true that political rhetoric and popular press looks towards preventing the local industry through the process of protectionism and are against free trade so that the local economy can be prevented.
Research has also shown that no economist proposes the fact that protectionism is good for economic growth but instead free trade through the policy of trade liberalization is important for economic growth and development.
There are different reasons which have been identified for trade liberalization and the manner in which economic growth and development is witnessed which have been presented below Trade liberalization through the process of openness in imports helps to reduce cost and improves the efficiency of the domestic industry. Exposing the domestic industry to foreign competition provides an opportunity for the domestic industry to become more efficient. It helps enhancement of technology and reduction of cost as foreign inputs are easily available which ensures better productivity and less wastage.
As a result, better results are achieved at a lower cost which thereby helps the economy to achieve better growth rates and development for the economy on the whole.