Introduction to Microeconomics
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For centuries there has been an ongoing debate. Which trade policy is better, is it the Free Trade Policy or the Protectionist policy? To answer this question you need to have an understanding about these two policies. There is no easy answer for this. You might think they have a lot or some things in common. Fact is they don’t have that much in common at all. In this paper we are going to talk about the differences of these policies and what makes them so important. We can’t solve this debate but we can have a better understanding about them.
You may be asking yourself what is the Free Trade Policy? Free Trade agreements phase out barriers to trade between two particular countries or among a group of countries. The United States has entered many bilateral and multi-lateral free trade agreements, a major source of U.S. trade policy in recent years, according to the Government Accountability Office. The major trade agreements include the North American Free Trade Agreement and the World Trade Organization agreements. (www.ehow.com/list6704085differences-between-trade-protectionism.html)
You may have heard of the World Trade Organization (WTO) but really don’t know what is or what it does. The WTO has no laws or rules prohibiting banks from lending only in their own domestic market, which could lead financial institutions based in other countries to withdraw investments reports the Washington Post. The WTO has said that protectionism could prolong the current global economic recession, according to Post. (www.ehow.com/list6704085differences-between-trade-protectionism.html) Where the WTO has no government regulation and allows individual producers to decide their own actions there are more problems that tend to arise. Some problems such as producers don’t always produce...