The paper "Policy of Trade Liberalization " is a great example of micro and macroeconomic essay. The growth of the economy has been largely attributed to trade liberalization as it has accelerated the pace at which the economy is growing. This paper will evaluate the manner in which trade liberalization has contributed towards economic growth in comparison to economies not adopting trade liberalization. Economies around the world started to adopt trade liberalization policies in the 1980s which gained pace during the 1990s as most economies started to practice trade liberalization.
It was seen that economies that adopted trade liberalization were witnessing a faster rate of growth compared to economies which didn’ t adopt the practice of trade liberalization. This thereby forced economies to look at trade liberalization in a positive framework as it was supporting high growth rates and made economies to move from the traditional mechanism which was followed. It was witnessed and is still practiced in certain regions of the globe where measures like protectionism are used so that the local industry can be protected against other players. These economies are against the policy of free trade and look at safeguarding the local industry.
Research has shown that no economist proposes trade protectionism but instead proposes free trade but still economies to protect the local industry look at having a certain degree of protectionism. This is correct to a certain extent but economies along with it have to practice the concept of free trade so that better economic growth and development can be achieved (Krugman, 2003). Having a mix of both protectionism and free trade will help to gain from both as it will protect the weak industries and at the same time foster other industries to grow and face competition at a higher level.
This has brought forward varied reasons for economies to look at trade liberalization so that better growth rates can be achieved. Trade liberalization through the policy of open trade helps to reduce cost and brings efficiency in the local and domestic industry.
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