The Impact of Free Trade on Developing Nations
INTRODUCTION
Free trade has long been considered important for countries for hundreds of years as it opens up billions of dollars for nations, as well as new resources and technology. (Economy Watch 2010, P.1) Countries trade when on their own; they do not have the resources or ability to satisfy their wants and needs. They produce a surplus of a certain resource and trade it for something they need. (Heakel 2003, P.1) Countries have different resources from which they can trade and this is why there is a divide between trade being beneficial for countries or not. Free trade should guarantee the most efficient allocation of resources and the cheapest prices for consumers. It is believed that some countries have more of an advantage to free trade than others based on climate, natural resources and geographical features. (Dixit, Norman 2002, P.5-6) Free Trade allows everyone equal access to all markets, countries who are involved should experience rising living standards, increased incomes and higher rates of economic growth. (Hill 2011, P.168)Free trade virtues have been praised for three hundred years. But can such a theory work in practise? Specifically, could it help the least developed countries of the world provide themselves with a better quality of life? Increasing poverty and unemployment figures reveal that free trade is not always beneficial. Therefore I will pay special attention to the victims of free trade, in this case many developing countries. For most part these are particular groups of countries that are handicapped by free trade and who have not had the opportunity to rise above economic ills due to factors such as the ones mention above and weak governments. The aim of this essay is to argue the good and bad and the theory behind the impact of free trade on developing nations, but before doing so it is important to define what free trade actually is.
DISCUSSION
From a normal person’s perspective, free trade involves the reduction of barriers
Free trade has long been considered important for countries for hundreds of years as it opens up billions of dollars for nations, as well as new resources and technology. (Economy Watch 2010, P.1) Countries trade when on their own; they do not have the resources or ability to satisfy their wants and needs. They produce a surplus of a certain resource and trade it for something they need. (Heakel 2003, P.1) Countries have different resources from which they can trade and this is why there is a divide between trade being beneficial for countries or not. Free trade should guarantee the most efficient allocation of resources and the cheapest prices for consumers. It is believed that some countries have more of an advantage to free trade than others based on climate, natural resources and geographical features. (Dixit, Norman 2002, P.5-6) Free Trade allows everyone equal access to all markets, countries who are involved should experience rising living standards, increased incomes and higher rates of economic growth. (Hill 2011, P.168)Free trade virtues have been praised for three hundred years. But can such a theory work in practise? Specifically, could it help the least developed countries of the world provide themselves with a better quality of life? Increasing poverty and unemployment figures reveal that free trade is not always beneficial. Therefore I will pay special attention to the victims of free trade, in this case many developing countries. For most part these are particular groups of countries that are handicapped by free trade and who have not had the opportunity to rise above economic ills due to factors such as the ones mention above and weak governments. The aim of this essay is to argue the good and bad and the theory behind the impact of free trade on developing nations, but before doing so it is important to define what free trade actually is.
DISCUSSION
From a normal person’s perspective, free trade involves the reduction of barriers