International Trade & Institutions Essay Example | Topics and Well Written Essays - 1500 words

International Trade & Institutions - Essay Example Whether or not free trade is fair is a concept that demands a great deal of attention and concentration, and especially by the people who are directly involved under such aegis. The question that arises here is that whether or not free trade assists in the developing countries or it just brings about success touch points for the world’s biggest superpowers (Johnson, 2009). Free trade theory was devised by several economists for the sake of economic growth. Proponents of free trade regularly cite the theories of eighteenth century Scottish economist Adam Smith and David Ricardo, a nineteenth century British economist. They argued that if government stays out of trade, then wealth created by private businesses and trade will benefit the public at large. The gentlemen also asserted that countries need to specialize in the goods that they can produce most efficiently and cheaply. Also when countries trade their specialties, nearly all the stakeholders receive the benefits undoubte dly (Condon, 2002). Free trade theory claims that economic competition with minimal government intervention will lead to greater efficiency, productivity, and innovation; will reduce costs for consumers; and will free up more capital for further investment. First of all, the role of free trade is removal of trade barriers such as tariffs which should promote economic growth, foster a cooperative spirit among nations, help developing nations into becoming independent economies, and end poverty around the world. Free trade benefits developing countries because it provides economic opportunities, improves working conditions, and advances their technology, becoming more globally conscious. As far as the undertakings of the developing countries are concerned, free trade provides them different opportunities for economic growth. If free trade becomes a universally acceptable economic system, provisionally wealthy countries and developing countries both gain a number of benefits to grow th e worldwide economy. Quite rightly so, trade is the greatest factor that leads to economic growth across all segments within the society that one can speak of. When trade occurs as a result of true demand and supply, the economic growth that occurs also truly reflects the increase in economic welfare. Thus, free trade brings about increased economic growth, which means better and more jobs; advanced standards of living and so on. Free trade is not only beneficial for wealthy countries, but also developing ones. The growth is the solution to world poverty. Additionally, free trade improves working conditions for workers in the developing nations. Free trade can help global workers who are working under torrid conditions. In a hypothetical situation, if a person came up with an explanation that free trade was bad as the workers are laboring under life-threatening conditions to produce the goods that normal people buy, then there could be a number of reasons to suggest in the wake of s uch a discussion. Perhaps the consumer habits need to be changed or something that is totally new and comprehensive in its own right. Even though people realize a large number of workers are laboring under bad conditions, everybody wants to buy cheaper priced goods. I think it is essentially one unchangeable habit on the part of the global consumers. And there are a number of reas