Free Trade in Countries
Name: HE MIAO(Amy)Course: LANG 1002A T36Title: Free TradeInstructor: Dinesh Most citizens of exoteric countries,like China,will have observed the impact of free trade in every aspect of life.Look around the house:the furnitures might be made of wood grown in Brazil and manufactured in the USA;and the televisions may be assembled with components from all around the world.The reason for these ubiquity phenomena will be discussed in this essay,and it will be argued that free trade,an economic policy about reducing international trade restrictions and accelerating commerce liberalization,has had a profound influence on the economic well-being.Specifically,this essay will explain how free trade has affected the macro and microeconomic;how the ideological trend of free trade came into being;and how it exerts a far-reaching influence on the international economics and politics. Free trade was a game changer because it immensely promoted the economic development after the Industrial Revolution owing to its static revenues and dynamic benefits.These static revenues can be roughly divided into two parts,according to the perspective of individual consumers and the integral states.On one hand,specialization was made possible through free trade which meant that countries could specialize in what they were adept at and enjoyed a wider variety of goods and services.(Mankiw,2011).By means of the international exchange, countries could open up new possibilities to obtain those products which were difficult to be manufactured domestically or engendered prohibitively expensive production cost.Consequently,
residents of those countries were often expected to gain a higher standard of consumptive satisfaction.On the other hand,full play were given to a nation’s comparative advantages to achieve the optimal allocation of resources through the international division of labour.In terms of the dynamic benefits,free trade gave rise to scale effect,competiton effect and learning effect,sequentially accelerating job enlargement,enhancing income,promoting the upgrading of industries and ultimately leading to the sustainable growth of economy.Over the pastcentury,the United Stated experienced great prosperity due to the reduction of trade barriers and the elimination of trade discriminations.(Stephen,2002).It followed that not only was free trade a theoretical concept,it was also a practical policy with actual benefits,leading the states to the path of stability and long-run growth. The success of free trade was based largely on its specific economics and political background as well as the solid theoretical foundations laid by Adam Smith.Economically speaking,the first Industrial Revolution witnessed the great progress in productivity and technology,accounting for the booming capitalism.Under this circumstance,the original