Discuss the arguments put forward by economists to justify reducing trade barriers.

Naturally countries hold different option endowments and efficiencies of production. Some nations will keep labour forces more skilled in certain sectors then other countries and thus will hold better efficiencies in production in those sectors. Others may have large resource endowments; and hence the need for nations to trade in order of magnitude to sum up their peoples standard of living. The theory of free becomes based on the lead of comparative advantage. Nations will specialize in the production of goods and function in which they can produce with a lower prospect cost compared to other nations. The nation should export its surpluses of the goods and services which it has comparative advantage in, and it should import the goods and services in which it has a comparative disadvantage. Free trade results in promoting economic efficiency and growth, change magnitude the supply of good whilst reducing their costs. Specialisation inspires greater productivity, resulting in an append in real income and standards of living.

Many trade barriers exist such as tariffs, quotas and subsidies and result in inefficient allocation of resources, and consequently a reduction in economic welfare. Protectionist measures evoke an cast up in prices for imports, reducing the standard of living for the house servant consumer.



The of import focus of the protection is to shift the demand from overseas producers to domestic producers by making the domestic product more attractive. A tariff for example is a tax placed on an import, resulting in an increase of price passed on to the consumer. This price increase then makes the domestic product more attractive to the consumer, although the consumer immediately pays more for the same quantity of product.

Therefore economists believe that there is soaked reason to reduce trade barriers. Protection always favours peculiar(a) industries, in many ways representing a misuse of political science funds and authority.

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