The debate about free trade

The debate about free tradeAbstractIn the process of globalization, what is one country …s goal which shall be pursuit? What the means should be taken to achieve their goals? Should opening up free trade deeply Or take trade protection? what kind of trade relationship between nations in is mutually beneficial? When the benefit between country and import and export companies is different?.And so on. Facing a series of problems ,economists‟ answer is extremely cautious .it is very difficult to find a economist who advocates free trade and avoids the protection of champagne completely .Also it will be difficult to find a economist who accepts complete protection and deny free trade ,this fits the objective economic state conform. Because, as long as one country participates in international trade, the country must ask the free trade and trade protection .of course, the truth is always that home countries always hope their trade partners implement free trade, and to its own economic implement moderate protection.For a long time there has been a contest between free trade and trade protection as the best strategy of promoting local and global economy. When the globe is again in the midst of economic recession, this contest intensifies. The current recession knocks out a severe blow to free trade as the “game rules” of world economy and aggravates the perplexities of free tra de in certain aspects, which then arouses suspicion on the legitimacy of free trade. In order to address domestic economic and social problems, the “stimulus packages” of some countries offer much support to trade protection, further intensifying this contest. Confronted with the global economic disaster, trade protection can be helpful for alleviating the pressure in a given economy and thus mitigating domestic contradictions in a short period, but it may also complicate the legal order of trade and bring hindrance to domestic markets as well as international ones, and consequently, it will jeopardize the rights and interests of ordinary consumers and even stir up the grievance and resentment domestically or internationally. As the current economic recession has been a pressing issue for all the countries, there is a dire need for concerted efforts in the globe to stimulate the vigor of world economy and tide over the disaster.Free trade is the pursuit of WTO values ,and the theory of comparative advantage is the main theory for WTO. However ,WTO does not solve the national interests of the differences between countries as well as uneven distribution of benefits of trade and other practical issues ,and comparative advantage theory itself .WTO cannot radically eliminate trade protectionfactor ,so ,when the WTO promotes trade liberalization , allows member countries to adopt appropriate trade protection police ,for the member countries finding a best position to achieve their own interests and promote further cooperation. The essence of the trade protection under trade liberalization is the compromise of WTO ideal and the reality.Free Trade and ProtectionismP rotectionism helps to protect nations from an increase in the amount of imports, which could affect domestic production. One of the most common protectionist policies includes raising the price of imports via tariffs, keeping industry in the nation more competitive in the domestic market, according to Humboldt State University. Protectionism can also include import quotas, or the restrictions on the quantity of imports allowed to enter a country.Free trade, on the other hand, lifts barriers to allow for the free flow of trade between two or more nations. Trade agreements can foster economic growth by increasing trade for a nation. Free trade opens markets and economic opportunities. Free trade allows for fair competition andnon-discriminatory regulations, according to the Office of the United States Trade Representative The debateA long-standing debate in development economics has been the one between advocates of free trade and proponents of protectionism in developing countries. While the former argued that free trade would offer large opportunities for poor countries to improve their situation, the latter considered trade to be harmful to poorer countries and typically preferred a combination of protectionism and development aid. This opposition tended to dominate the discussion about the role of international trade in the Third World. (Bhagwati (1993), Krueger (1990))In“How fair is fair trade”we can say free trade is not beneficial to small developing countries. A third position has come up. This position maintains that international trade can be beneficial to developing countries as long as it is performed in a just manner. But manner is not accepted by every counties.From the integration of the world economy point, or like, Adam Smith that the global economy as a big family, free trade has Obviously higher efficiency. Trade promote division, and division improve the professional and the production efficiency. Also the trade promote the demand and supply and the increase in turn promote the trade development.Trade protectionism setting t rade barriers, and to reduce the efficiency, including the production efficiency and trading division of efficiency, restrain competition and innovation, increasing the transaction cost, cause the social welfare loss.In fact ,free trade may bring some disaster to some countries. Untapped markets become promising after countries and regions make changes in their internal political and economic structure. Emerging markets may change, however, because they are subject to political, military and environmental influences. Some nations lose investors and exporters due to political instability, unfair trade practices and economic uncertaintypeople agree that free trade is a mixed blessing. As for whether free trade is beneficial for the poorest in society, even economists are divided. Competition drives down wages and makes companies cut corners on healthcare for their poorest workers. In other words, free trade directly and indirectly damages the health of the poor. According to a recent article, article, "Is TradeGood for Your Health?" in the Review of International Economics, economists Ann L Owen and Stephen Wu of Hamilton College build on an increasingly strong, but rarely reported, body of literature demonstrating the health benefits of free trade. Owen and Wu conclude that openness to trade and higher volumes of trade are powerfully associated with reductions in infant mortality and increases in life expectancy, particularly among women in developing countries. As Owen and Wu's findings sugge st, free trade would do more for the health of the world's poor than the most generous acts of charity.In the book” Free Trade Today “, Bhagwati could not be on more solid ground on the funda mental question of whether free trade is good policy. His sophisticated, far ranging, and practical defense of free trade places the doctrine on a more solid footing than ever. When we consider that government officials often lack sufficient information or pure motives, free trade becomes the first, best policy-even if a higher state of domestic welfare could be reached in theory if just the "right" policies were implemented. Two centuries after Adam Smith, free trade remains a broad, secure, and accessible ledge high up the mountainside of good government policy. Jagdish Bhagwati wisely warns us in Free Trade Today that those final icy feet to the summit are not worth the risk.Free trade connotes open but orderly competitions. The rules of multilateral trading system, the WTO, reached on mutual consent through negotiations or bargaining among its members, favored a competitive order of free trade. However, because developing countries and developed ones were not at an equal start in many aspects within the WTO, these rules, seemingly fair and just, often lead to unequal outcomes of trade. Furthermore, some developed countries always hold domin ant positions in the global economy and possess “justifiable, beneficial and powerful” comparative advantages in international trade competitions. By contrast, most developing countries are frequently on passive and inferior status in these aspects. This long-lasting disparity is also likely to affect the unfair competition outcome in the future international trade. If developing countries‟ voice is weak, if any, with regard to global issues, the rules will be inappropriate and expensive for poor countries.7 In particular, developing countries may fear that they will be “crowded out” by developed countries in terms of access to world trade in the current global economic recession. In some key aspects, however, fair treatment and wealth acquisition can be mutually influential. Thus, the legal system of free trade for fair competitions can improve the sustainable increase and the development of economy and enable poor countries to participate in international society and reduce poverty.WangYingbo write in his paper that “One country‟s trade policy like a tug of war between trade protection and free trade, sometimes to the left, and sometimes to the right. His idea is that when the economic downturn, trade protectionism have advantage; but when economic become prosperity, free trade is on the upper hand, in economic development Process they appear alternately. Generally speaking, in international trade ,competitive states tend to free trade, weak competitiveness countries tend to trade protection. Protection and freedom are relatively.In “Do Free Trade Agreements Increase Economic Growth of the Member Countries?”Jung Hur utilize an alternative trade openness measure, which implies …mutual‟ trade liberalization, and the nonparametric matching approach, in order to determine whether an FTA exerts an effect on the growth of the two countries involved in the FTA. The principal finding of this paper is that FTAs appear to exert an insignificant effect on growth performance from the nonparametric matching approach. An FTA has an insignificant effect in the one- to 10-year period after the launch of the FTA. However, more importantly we have found an upward trend in the gap between the growth rates of per capita GDP among countries within an FTA. This implies that uneven FTA effects exist across countries within an FTA. Some countries within FTA systems appear to enjoy positive FTA effects on economic growth, whereas their FTA partners might experience negative FTA effects on their economic growth rates. This result shows that trade policy makers should not consider FTAs as a strategy that guarantees rapid economic growth. Thus, caution should be exercised in the design of FTAs in order to ensure the FTA‟s positive effectsFree Trade Today is a great read for all those interested in international trade and development, regardless of their ideological stance. It offers deep insights of a powerful idea not only to those fogged by rhetoric and misinformation, but also to many of its strong supporters.LiWenlong writes in his article “The essence of the WTO is the compromise with Ideal and reality” WTO continues to promote trade liberalization and at the same time allows member countries to take moderate trade protection measures. In the practical application of WTO, embodies Effective unity and coexistence to the contradiction. Therefore, the future development of the WTO policy trend should be moderate trade protection Under the free trade trend.Member nations of the World Trade Organization have reconsidered protectionist policies. The WTO has no laws or rules prohibiting banks from lending only in their own domestic markets, which could lead financial institutions based in other countries to withdraw investments, reports the Washington Post. The World Trade Organization has said that protectionism could prolong the current global economic recession, according to the Post. Since 2008 a number of nations have increased tariffs, applied import restrictions and reinstated subsidies. In addition, some countries have imposed financial protectionism, requiring financial institutions based in their countries to invest in domestic companiesConclusionEither free trade or trade protection is an approach essentially to acquire trade interests for countries. When the current global economic recession has become a pressing issue for all countries, however, there is a dire need for collective global action to properly coordinate the relationship between free trade and trade protection and to restore the vigor of the world economy as a whole. Open economy will be in a better position to stage a faster and stronger recovery from the crisis. But in the midst of the current economic recession, trade protection, seemingly a matter of course, is likely to invite trade conflicts between the countries. Many conflicts, especially quarrels over interest divergences, have to do with the existent common and fundamental interests of the parties, but most of them are negotiable. “In the terminology of game theory, most interesting international conflicts are not …constant-sum games‟ but‟ va riable-sum games‟: Thesum of gains of the participants involved is not fixed so that more for one inexorably means less for the other.” In practice, it is true that one party‟s ability to get an upper hand in the negotiation is closely related to others‟ decisions, but it is fundamental to admit that “there is a powerful common interest in reaching an outcome that is not enormously destructive of values to both sides.”48 Even though free trade allows for value discrepancy, this does not implicate unfairness. Only by equal access to trade can all the countries cooperate in world trade and effectively settle trade conflicts among them. On the one hand, free trade broadens the room of competition for countries to seek opportunities. On the other hand, if countries become closely connected, theiri nter dependence inter se will also be greatly enhanced. Nevertheless, this situation does not mean that “One country can promote its economy at the expense of the other‟s total interests, nor the other country will suf fer a loss if one country obtains its interests of free trade.”Given the adverse effects of free trade, it is necessary for a country to properly intervene, but this is by no means an excuse for trade protectionism. Many facts have convincingly told that the legal system of free trade is superior over a government-dominated trade framework in promoting economic development and making efficiencies. Competitions for trade interests will further intensify with the advancement of free trade, which makes it even more significant to reconcile the conflict between free trade and trade protectionism. The competitive areas are not pure battlefields, but areas of potential interdependencies as well as cooperation. Therefore, the global economicrecovery depends on the international society‟s ability to restore the confidence of countries in free trade.References1 Free Trade Today Free Trade Today, by Jagdish Bhagwati2 Free Trade Agreements Increase Economic Growth of the Member Countries? Jung Hur World Development Volume 40, Issue 7, July 2012, Pages 1283–1293 How fair is fair trade? Maseland, Robbert; de Vaal, Albert. De Economist150. 3 (Sep 2002): 251.4 贸易保护主义与自由贸易主义之争王迎波;经济导报社领导之友, , 编辑部邮箱2009年03期5 自由贸易趋势下的适度保护贸易:WTO理想与现实的妥协黎文龙; 湖南文理学院学报(社会科学版), Journal of Hunan University of Arts and Science(Social Science Edition), 编辑部邮箱2008年03期6 How fair is fair trade Maseland, Robbert; de Vaal, Albert. De Economist150. 3(Sep 2002): 2517 [Free trade: risks & rewards] Grayson, Kyle; MacDonald, L Ian. Labour 48(Fall 2001): 290-292.8 How fair is fair trade? Maseland, Robbert; de Vaal, Albert. De Economist150. 3(Sep 2002): 251.。