Merits/Arguments for free trade
- It leads to improvement of quality of goods and services due to competition
- Promotes efficiency because it encourages goods or services to be produced where natural resources, infrastructure, or skills and expertise are best suited to them.
- Widens market since goods produced in one country can be consumed in another country
- Source of government revenue for export and import duties
- Creates employment from free international labour mobility
- Encourages specialization reducing cost of production
- It strengthen international co-operation through trading partners
- Discourages monopolistic tendencies
- Promotes industrialization through free movement of technology and materials.
- It promotes the vent for surplus theory. The Idle resources in one country are put to effective use so as to increase on export volumes
- Improves customer’s choice because of variety of goods from other countries
- Promotes innovations and inventions due competition
- Reduces corruption
- Reduces malpractices such as smuggling.
- Reduces domestic/demand pull inflation due to competition
CATEGORIES Economics
TAGS Dr. Bbosa Science
