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How Free Is the Fee Trade

  • Date Submitted: 02/21/2011 07:20 AM
  • Flesch-Kincaid Score: 50.5 
  • Words: 14566
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Introduction

The twenty-first century is increasingly global. The sharp rise in communication tools such as television, internet, airplanes and telecommunications has blurred the nation-state borders and merged people as global citizens of an interdependent world. Martin Luther King aptly said

“Before you finished your breakfast every morning, you have depended on more than half of the world.”  

With coffee coming from Africa, tea from India or milk from cows imported from Australia, one does enjoy the benefits of Free Trade. Despite the many procuring advantages, there are several pitfalls of Free Trade that have led to a growing mistrust in the public, especially belonging to the developing nations. The years of dispute in the World Trade Organization’s ministerial Doha Rounds prove the discontent of member states to reach to an unbiased conclusion. However, before expanding the pros and cons of Free Trade and excavate the myth of “free” in international trading system, a genesis of Free Trade is essential.
What exactly is Free Trade? Free trade refers to the absence of any barriers/restrictions on international trade between two (or more) nations. Free trade is the opposite of Protectionism.   Where Protectionism calls for tariffs and duties on imports to protect a country's domestic producers, Free trade is a policy of allowing imports and exports to flow freely between nations without any restrictions. Free trade also enables foreign companies to trade just as efficiently, easily, and effectively as domestic producers.  
Free trade areas allow the agreeing nations to focus on their comparative advantage and to freely trade for the lacking goods. Eighteenth century economist David Ricardo put forth the doctrine of comparative advantage: free trade between nations benefits each nation involved. A free-trade policy does not necessarily imply that the government abandons all control and taxation of imports and exports. The State does not hinder...

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