Sunday, May 13, 2007

Here is my fourth post.

Reflections:

Say yes to free trade. Free trade has so many advantages to the country's economy as well as the global economy.

Free trade means the elimination of tariffs and other protective barriers. This means that countries exporting would not have to pay extra taxes, and so meaning that they have more profit.

The first advantage of free trade on countries is that they allow countries to specialize on their goods and services which they are more efficient in producing as compared to other countries in the world. These goods and services can be exported to other countries without tariffs, and products which other countries are specialised in can be imported into the country also without tariffs. This allows both countries to have higher profit, and yet get goods and service of good quality at lower prices.

So, to specialise (to be efficient in producing a certain good or service, or having good quality goods and services in a certain area), countries have to be innovative, whereby they have to create and invent goods which are much better than similar goods from other countries. Such innovation develops technology, and also promotes economic growth, which creates more highly paid jobs, and thus creating higher standard of living.

Free trade also causes countries to be at peace with each other. This is because countries see the economic benefit of being at peace with other countries. If they are not at peace, and countries severe ties, causing no them to be unable to get the benefits from free trade with those countries.

Global free trade also has alot of benefits on the global economy and the global population.

The first benefit is that it can lift at least 500 million people out of poverty over 15 years. Since most of the poor are farmers, the elimination of agricultural tariffs can allow them to have higher profits and thus break free from the cycle of poverty.

Global free trade also can improve the global economy, since there are no tariffs and taxes on imports and exports. Thus countries can have higher profits, and also, countries will invest more in each other, and also increase in terms of GDP.

References:
1. http://www.iie.com/publications/newsreleases/newsrelease.cfm?id=101
2. http://www.heritage.org/Research/TradeandForeignAid/bg1761.cfm

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