What are the primary pros and cons of free trade or fair trade in the current Sino-American quagmire?

Jonah Whanau

2018-05-02 06:32:00 Wed ET

What are the primary pros and cons of free trade or fair trade in the current Sino-American quagmire? Free trade means allowing goods and services to move as freely as possible across different countries. As countries develop over time, they start swapping goods and services across national borders.  As transport improves in speed and quality, these countries start buying and selling goods and services abroad. When governments struggle to raise domestic taxes, it is easier to carry out the fair trade policy of levying heavy duties on foreign imports. Most economists eventually gain the upper hand because keeping these trade barriers as low as possible proves to be a sensible economic policy.

In accordance with the law of comparative advantage, free trade allows countries and corporations to specialize in intermediate production, service provision, or new tech innovation. Further, free trade expands the size of the economic pie and thus shifts scare resources from the less productive firms to the productive ones.

However, not everyone becomes better off. Some receive a smaller slice of the pie because product market concentration and dominance can exacerbate economic inequality. Free trade enhances the political discourse of peace and cooperation. It is important for the government to improve affordable residential real estate and labor mobility to counterbalance the exogenous shocks from fair trade barriers.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Zillow share price plunges 20% year-to-date as Redfin and Trulia also experience an economic slowdown in the real estate market.

Daisy Harvey

2018-11-17 09:33:00 Saturday ET

Zillow share price plunges 20% year-to-date as Redfin and Trulia also experience an economic slowdown in the real estate market.

Zillow share price plunges 20% year-to-date as its competitors Redfin and Trulia also experience an economic slowdown in the real estate market. The real es

+See More

Nobel Laureate Joseph Stiglitz proposes the primary economic priorities in lieu of neoliberalism.

Fiona Sydney

2019-06-29 17:30:00 Saturday ET

Nobel Laureate Joseph Stiglitz proposes the primary economic priorities in lieu of neoliberalism.

Nobel Laureate Joseph Stiglitz proposes the primary economic priorities in lieu of neoliberalism. Neoliberalism includes lower taxation, deregulation, socia

+See More

Ford and Baidu team up to test autonomous cars in China.

Jonah Whanau

2018-11-01 08:36:00 Thursday ET

Ford and Baidu team up to test autonomous cars in China.

Ford and Baidu team up to test autonomous cars in China. For the next few years, Ford and Baidu plan to collaborate on the car design and user acceptance te

+See More

The SEC sues Elon Musk for his August 2018 tweet that he has secured external finance to convert Tesla into a private company.

Amy Hamilton

2018-09-29 12:39:00 Saturday ET

The SEC sues Elon Musk for his August 2018 tweet that he has secured external finance to convert Tesla into a private company.

The Securities and Exchange Commission (S.E.C.) sues Elon Musk for his August 2018 tweet that he has secured external finance to convert Tesla into a privat

+See More

Government intervention remains a major influence over global trade, finance, and technology.

Amy Hamilton

2023-08-31 10:22:00 Thursday ET

Government intervention remains a major influence over global trade, finance, and technology.

Government intervention remains a major influence over global trade, finance, and technology. Nowadays, many governments tend to eschew common ownership

+See More

The recent British pound depreciation is a big Brexit barometer.

Apple Boston

2019-08-20 07:33:00 Tuesday ET

The recent British pound depreciation is a big Brexit barometer.

The recent British pound depreciation is a big Brexit barometer. Britain appoints former London mayor and Foreign Secretary Boris Johnson as the prime minis

+See More