Question

1. Some critics of freedom of trade between nations have argued that by allowing the imports of a foreign country into the market of your own country this can threaten the loss of jobs in your domestic economy. Advocates of free trade have responded to these criticizing by explaining why this is not necessary the case, since (a) imports must be paid for with exports; and, (b) that lower priced imports raise the standard of living and frees up resources and income to other, new or better things.

Explain in detail and contrast the logic of these two perspectives – free trade versus protectionism. Having thought through these arguments, what conclusions have your reached? Why?

Answer 1

we can analyze both perspective-

• critic perspective
• supporter perspective-

critic perspective -

1. they believed that over-reliance on foreign trade is not a favorable event in long term business
2. foreign trade leads to lack of efficiency in the domestic country
3. traditional/backward manner of production leads to depend on imports
4. it leads to unequal growth of the economy
5. it leads to wastage of natural resources of nation.

supporter perspective-

1. fulfillment of need
2. better foreign relation
3. cost effective and quality products
4. availing innovative technology
5. utilization of surplus output

CONCLUSION-

we can observe that both have their respective and correct prospective,we can determine that effective foreign trade can be executed when

• there would be balance foreign trade
• instead of reliability country would intended to develop their resource as soon as possible
• country should prefer to develop their resources first which would help to increase employment and innovation in the country.