Question

Case for Free Trade

The act of opening up economies for trading is known as free trade or trade liberalization. This is done by bringing down trade barriers like tariffs. Trade liberalization allows goods and services from everywhere to compete with domestic products and services.

Globalisation along with free trade can adversely affect the economies of developing countries by not giving equal playing field by imposing conditions which are unfavorable. With the development of transport and communication systems goods and services can travel faster and farther than ever before. But free trade should not only let rich countries enter the markets, but allow the developed countries to keep their own markets protected from foreign products.

Countries also need to be cautious about dumped goods; as along with free trade dumped goods of cheaper prices can harm the domestic producers.

Explain the meaning of ‘trade liberalisation’.

Hint:

Trade liberalization helps in increasing market access for countries by allowing them to import and export goods more freely, which can boost economic growth.

Answer 1

Trade liberalization refers to the process of removing or reducing trade barriers, such as tariffs, quotas, and regulations, to allow for the free exchange of goods and services between countries. It facilitates the flow of international trade and allows goods and services from all over the world to compete with domestic products.