Question

Should we have unrestricted international trade? What does "unrestricted" mean? Does it mean "free trade", no tariffs, no taxes, no theft of intellectual property?

Answer 1

Unrestricted International Trade refers to "free trade" between different countries globally. In other words, there are no tariffs or import quota that is imposed by the government.

The benefit of unrestricted trade is that each country can specialize in production of goods or service based on their comparative advantage. This allows more diversity of goods and services in the market at competitive prices. Free trade also prevents economic isolation, which is critical for a country that has few goods and services produced in their own markets.

On the other hand, restriction on international trade through imposition of tariff or quota hurts the economy and the consumers as a whole. Goods and services tend to become relatively expensive and countries diversify beyond their comparative advantage.

An important point to note here is that in unrestricted trade, countries should not get involved in currency manipulation as it destroys the essence of free trade and can translate into trade wars.

Overall, it is important to have unrestricted trade as it benefits countries as well as consumers. Global trade also helps in synchronized growth of countries.