Int Trade Essay Example | Topics and Well Written Essays - 1500 words

Int Trade - Essay ExampleAs a result, these countries involve to flock wind municipalally or local anestheticly. To note, international trade brings in more income to a country than local trade (Organisation for Economic Co-operation and Development, 2009). When a country engages in international trade, it could have the greatest number of customers as well as investors. A substantial amount of income could be expected. In such case, it is proper to check over the current international trade policy of the world towards an equal hazard for countries to grow and develop. The forgodom to trade or free trade shall be thoroughly discussed and analyzed. Free Trade Free trade is define as an economic system wherein labor, goods and capital flow freely between countries without barriers that could hamper the trade transition (Smith, n.d.). This means that a country could trade whatever goods and services to early(a) nations. There is equal opportunity to trade for the participatin g countries. There is no barrier such as tariffs, import quotas and taxes (Smith, n.d.). In other words, at that place is no intervention from the government (Anon. Whats, n.d.). The area in trade is open to e rattlingone who is interested. There is no restriction of some sort. This economic policy allows foreign individuals and companies to trade smoothly and efficiently as the domestic producers (Smith, n.d.). Stated otherwise, in this system, both(prenominal) the foreign and domestic producers have the same autonomy with regard to trade. They both have the same rights in trading. For nations to apply this system, they make free trade agreements (FTAs). Countries actually adopt this economic policy for economic and political reasons. According to Arnold Miller (2004), there is easy access to one another(prenominal)s markets if free trade agreement is formed. This is logical since in FTAs, members are prioritized. This is to say that a free trade agreement creates a reciprocal ob ligation between the members (Organisation for Economic Co-operation and Development, 2005). A member is oblige to observe the free trade rules all throughout the life of the agreement. If a member grants free trade rights to another member, the other member is also obligated to accord the same right. In another aspect, there are countries which decide to form an FTA to encourage investment liberalization and trade (Miller, 2004). Developed and developing countries unremarkably create FTAs under this reason. Politically, FTAs are used to reaffirm and strengthen relations between countries (Miller, 2004). For instance, the United States of the States created an FTA with Israel in 1985 as a sign of economic cooperation and strong relation (Hassanien, 2010 Bard, n.d.). Basically, to make trade on the whole free would create an economic system wherein all types of government protection and intervention would be missing and borders would be open to unlimited amounts of imported goods (Anon. Whats, n.d.). It is contended that the result of such trade policy would be very beneficial to developed and industrialized countries. It would be easy for such countries to introduce and market their products to the domestic producers. On the other side, as to the developing countries, allowing a trade which is completely free would cost them inequality and scantiness (Anon. Whats, n.d.). Take for instance, countries such as Nepal, Haiti, Zambia, Peru and Mali have adopted free trade in their