Question

What are some arguments for free trade? For protectionism? As a consumer, which one would benefit you the most?

Answer 1

Solution

Some important arguments for Free Trade are as follows

1) Specialization Advantage

The free trade facilitate the specialization in division of labour, every country specializes in the production of those goods in which they have comparative advantage over its trading partners.

2) Prosperity

The free trade helps in the overall prosperity as it helps in increase in global output. It helps countries to buy goods at cheaper price. It leads to high production , consumption and all round prosperity.

3) Free from Interference

4) More international cooperation

The term Protectionism may be defined as barriers imposed by governments which restrict the importation of goods into a country. Some arguments for protectionism are as follows

1) Creation of domestic jobs

2) Avoids trade deficit

3) It prevent dumping

4) It protect Infant industry

Free trade is good for consumers as it helps in reducing prices by removing tarrifs and increasing competition.