Assessment Title: Essay
Assessment Topic: Critically evaluate claims that free trade is the most effective way to increase economic growth and global prosperity.
Tutor Name: Iwona Pringle
Student ID Number: 2172402
Date of Submission: 23 March, 2015
Essay topic: Critically evaluate claims that free trade is the most effective way to increase economic growth and global prosperity.
Free trade is refer to the unrestricted export and import of products or services in international markets without tariffs or duties (Sinn, 2014:8). Since the father of economics, Adam Smith proposed that international trade could promote economic growth, the effects of free trade on economic growth has been argued by many scholars (Singh, 2010:1517). In addition, free trade could affect global prosperity, which includes various aspects, such as environmental quality, social welfare, sustainable development and human well-being (ibid). Due to free trade is a controversial issue, this essay will analyze both positive and negative effects on economic growth and global prosperity. This essay aims to argue that free trade is beneficial to economic growth while it may bring more disadvantages to global prosperity. Firstly, it will demonstrate that free trade affect economic growth via increasing the exports, technological exchanges and pollution. This is followed by introduction of effects on global prosperity by environmental policies, scale of economy, cultural factor and employment. Finally, it will give a conclusion of this topic.
For economic growth, free trade could accelerate the economic growth by increasing the exports. For a start, free trade could reduce, even eliminate the tariffs, which can motivate plants to enter export markets and improve their export intensity (Baldwin & Gu, 2004:372). According to Bernard and Jensen (1999:1), the active participation of exports could make plants improve the products’ quality to