Free Trade Policy: Reality or Myth

Introduction

Free trade policy is one of the two types of trade policy of protectionism. There is no direct impact on the government's trade free access to the national market traders of foreign goods and foreign goods access to the national market. Operators may without any restrictions set their own volume of imports and exports. Government acts in this way, believing that free trade will lead to increased competitiveness and lower prices. Therefore, free trade promotes innovation and productivity. Two decade have passed since the neoliberal globalization began its implementation and its highly uneven effects gave rise to an ever increasing opposition. The debate is not about the requirement to make the most of the international resource in the effort of encouraging free trade, but it is about the examination if free trade has proven to be reality or fell short of its purpose, thus turning into just a myth. Throughout the researches, the contributors analyzed whether free trade is the optimal way to the establishment in the global climate during the past and the present years. The research view has been critically discussed in this paper.

Discussion

The myths

Free trade was a political doctrine arose in the eighteenth century in opposition to then prevailing mercantilism. Its basic premise is that the restrictions imposed by governments to exchange goods and services that harm the economy and reduce the volume of trade. Their supporters were divided between Utilities, defending pragmatism and benefits of increased trade, and Manchesterianos or liberals who defended the fundamental right of every person to freely exchange their domestic and foreign property.

Few economists have agreed on issues as much as in the virtues of free trade. Since the time of Adam Smith, there has been a virtual unanimity on to the idea that free trade is in the benefit of countries that trade and the world in general. However, in practice, it is one of the principles that is more targeted and carries restrictions, rather than free trade. Necessarily the exchange is based on the particular benefit of those trade, since the decision to exchange one good for another, as any economic decision, responds to only where voluntary decisions to be presumed that this action will be better. In this sense, trade is not based on the exchange of goods of equivalent value, but for each of the parties rather than the delivery necessarily having less value than one who receives, and then follows its willingness to change. In short, if an exchange between two parties is voluntary, it does not take place unless both believe that this exchange will benefit them. The current implementation of free trade has been much criticized. A common complaint is that developed countries tend to push the third world to open their markets to products industrial and agricultural developed nations, while opposed to open their markets to products agricultural third world. One argument in favor of free trade is that trade barriers such as import quotas and agricultural subsidies do not ...