Analyze The Conflict Between Free Trade And Protectionism Analysis

Introduction
This paper will analyze the conflict between free trade and protectionism and evaluate the long-term effects of protectionism on global free trade. To begin with, I will define the terms and methods that will be used to perform this analysis. Then I will analyze some on the protectionist trends in the United Stated, followed by calculations regarding GDP. A last there will be discussed how all these trends and changes will affect the global trade…….

Market economy
Free trade occurs within the framework of a market economy. A market economy is an economic system in which the production and pricing of goods are controlled by supply and demand and where most resources are owned and controlled by private individuals. This in contrast
In order to ensure that the free and open transactions in such an international market economy are maintained, and that the rules do not discriminate between parties from different countries, the role of the government is supposed to be kept very restricted. Ideally, the governments only role should be to guarantee that the markets are kept open and
This funding can be a cash payment, but can also take other forms, such as guidance, establishment of networks, support for research and development of new products, etc. Since subsidies do not cause price increases, there is no loss of consumer surplus. However, the subsidy may cause domestic industries to manufacture more units of the good than is supported by demand, which can lead to inefficiencies in those domestic industries, as well as to an inefficient allocation of global resources, as more resources than needed are used to manufacture this specific type of