Gains from Trade

Topics: International trade, Free trade, General Agreement on Tariffs and Trade Pages: 3 (569 words) Published: April 24, 2013
Assignment 1
Gains from trade
* Domestic competitive enhancement
* Advantage from advance technology
* Higher sales and profits
* Increase the existing product sale potential
* Extend market share globally
* Less dependent on existing/domestic market
* Optimize the use of world resources
* Economies of scale
* Cheaper goods
* More varieties and qualities goods to consumer
* Increase in world’s total outputs
* Higher standard of living
* Jobs creation
* Encourage consumption
Drawbacks from trade
* Loss jobs in home country
* Natural resources exhaustion
* More dependent on foreign countries
* Small countries doesn’t enjoy the international trade * Difficult to maintain close relationship between buyers and sellers * Over specialization
* Danger of starvation
* Disagreement between sellers and buyers
* Local production may suffer
* Local production may be overshadowed by international competitors * Wage inflation

Impact of trade liberalization benefits

Both consumers and companies can ultimately benefits from trade liberalization. For consumers, trade liberalization will provide lower prices of goods and also extend the range of quality goods and availability of services. For companies, they can benefits from trade’s risk diversification and channels resources to the place that contributes to the highest return. Moreover, it would facilitate competitions, investments and leads to an increase in productivity when it is accompanied by appropriate domestic policies.

Incidences of protection

Under ASEAN Economic Community, the 10 member countries are agree to reduce tariffs on a large range of products, but also attempted to eliminate the non-tariffs barriers, quantitative restrictions, and other cross-border measures. However, tariff reductions only apply to products under the “using content requirement” (Products that originate in ASEAN countries at least...
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