Question

GLOBALIZATION HOMEWORK

This week, we began our exploration of economic globalization by reflecting on the ideologies, policies, and institutions that have informed these processes since the early 1980s. In particular, we have been exploring the dominant ideology of neoliberalism, and its associated set of policies, most commonly known as 'free trade.'

In this discussion, you are asked to consider the pros and cons of 'free trade.' What are the benefits of free trade? What are the costs of free trade? How are these costs and benefits distributed around the globe? Does the dominant framework of 'free trade,' guided by the principles of neoliberal economics, foster or threaten global welfare?

Your original post should be approximately 8 - 10 sentences in length, using proper sentence and paragraph structure, and is worth 3 marks. Incorporate theoretical and empirical details drawn from readings and learning materials to support your ideas

Answer 1

Free trade is trade among countries for the goods and services without any kind of prohibitions or protectionism by the government of the countries.

The pros of free trade are:

• Increase of choices for the consumers as with the removal of barriers for trading of goods and services.
• Increase in competition among the countries lead to use of efficient use of production techniques and improving the quality of goods and services.
• The prices of the goods will also be reduced by the producers to compete in the market.
• Free trade will lead to innovation of new technology and efficient ways of production with which producers can compete well.

Cons of free trade are:

• Disadvantage to developing and underdeveloped countries because they don't have technology and efficiency to compete with the products of developed countries. So this leads to reduction of their growth.
• Disadvantage of home industries because free trade will increase cut throat competition and have chances of wiping out domestic industries.
• Penetration of harmful goods from foreign countries like cigarettes might increase because of free trade.

The costs and benefits of free trade are not equally distributed around the globe. There are some countries which benefit more from free trade like Japan, Germany and there are countries which have to pay the cost of free trade like poor countries around the globe.

Principles by neoliberal economics in relation to free trade embraced eliminating price controls, removal of trade barriers, promoting free market.

All these principles are totally in support and foster global welfare by increasing free trade.