Implications/Advantages/benefits/Merits and disadvantages/demerits of trade liberalization

Positive implications /Advantages/benefits/Merits of trade liberalization in Uganda are:

• increased employment opportunities
• Increased level  of output hence  increased growth rates
• Encourages  resource  utilization.
• Encourages inventions and innovations / technological transfer/ technological development.
• Competition forces firms to be efficient in order to remain in business,
• Improved quality of goods
• Increased revenue to government e.g. through taxation.
• Fights corruption.
• Tends to control structural inflation
• Improved B.O.P position as exports are encouraged.
• Reduces income and wealth inequalities among people and regions.      .
• Encourages foreign  investment/  inflow of capital / resources
• Upholds consumer sovereignty
• Wide variety infrastructural development
• Improves relations with (other countries especially donors.
• Promotes   entrepreneurial skills
• Promotes economic diversification

Negative implications/Disadvantages/demerits of trade liberalization in Uganda

• Makes  the susceptible to instabilities especially price fluctuations.
• Collapse  of local firms due to competition. ·
• It leads to unemployment.
• Danger of resource misallocation
• Duplication hence resource(s) wastage/ Depletion of some resources due to over exploitation.
• Flooding of markets that sometimes force prices to go very low to unacceptable levels.
• Distortion of Consumer choices due to advertisement / intensive sales promotional activities.
• Consumer  exploitation due to ignorance
• Encourages capital outflows.
• May give rise to monopoly and its associated evils.
• ·Leads to income and wealth inequalities.
• Environmental degradation is accelerated.
• Leads to Foreign economic dominance.