Free trade is a global public good

Topics: International trade, Free trade, Economics Pages: 13 (3615 words) Published: February 3, 2015
GOVT 3015

QUESTION # 2 - Free trade is a global public good. Critically discuss (20 marks).

Names of StudentFabyeon Burgess-Yearwood
Course TitleInternational Politics and Political Economy Tutor:Dr. Wendy Grenade
Due Date: April 08, 2013
In an attempt to answer the question at hand, a number of terms must be defined in order to gain a better understanding of the question; such terms include, trade, free trade, and global public good. In acquiring a greater understanding of the aforementioned terms, one would proceed to outline the cost and benefits of free trade and any barriers that are associated with trade which can prohibit the process of free trade. Once all the above information has been given, one can then analyze the information and make an inform decision on if free trade is a global public good. In defining trade, O’Brien and Williams stated that trade refers to the exchange of one commodity for another. They further noted that whenever two or more individual’s exchanges goods and services they are engaging in the process of trade, which has been in existence since the beginning of time - through the barter system. It is important to note that trade is an essential social activity that satisfies humans’ wants, needs and desire; in other words, due to the existence of trade persons has improve their standard of living incredibly (O'Brien and Williams, 2010). It should be noted that there are three different forms of trade namely domestic, intra-regional and international trade. Domestic trade is also refers as internal trade which looks at the purchasing and selling of local goods within the national boundaries of a specific country. It is believe that domestic trade functions as a link between producers and consumers; and it is sub-divided into two categories of wholesale and retail, through the exchange of goods and services. Trade is also done at the intra-regional level among members states of a regional bloc such as CARICOM; this is mainly done to enhance regional cooperation through regional institution while primarily focusing on the economic exchange of goods and services. However, international trade is done on a much wider whereas the focus is on the exchange of goods, capital and services conducted across international borders. Due to globalization, industrialization and trade liberalization, countries are allowed to engage in trade at all level rather to satify person wants and needs for domestic, intra-regional and international goods and services. It is important to note the principle of trade remains the same at all level and the only difference in the above three forms of trade is the cost and this is due to high level of taxes and trade barriers (Dunkley, 2004). Some scholars argue for the movement of free trade since it would remove all forms of trade barriers it would allow the world to trade freely with each other without any restriction. On the other hand, critics of free trade argue that free trade enhance exploitative conditiion where some nation has an unfair advantage over other due to their wealth and manufacturing capabilities. This is why it is argues that in theory, the concept of free trade is an excellent idea but in practice it is a human devastation on small island states and developing nations, as these countries lack the economies of scale that develop nations would have due to their size and economic power (Dunkley, 2004). Free trade can be defined as the absence of government resrtictions upon goods, capital, and the flow of labor between nations, which could possibly hinder the process of trade. It is believe that an advantage of engaging in free trade is that it allows for nations to...

References: Antweiler, Werner, and Daniel Trefler. "Increasing Returns and All That: A View from Trade." The American Economic Review Vol 92, no. Issue1 (2002): 93 - 119.
Dunkley, Graham. Free Trade: Myths, Realities and Alternatives. Bangladesh: Bangladesh University Press, 2004.
Hoekman, Bernard, and Michael Kostecki. The Political Economy of the World Trading System. Oxford, England: Oxford University Press, 1997.
Irwin, Douglas. Free Trade Under Fire. Oxford, U.K: Princeton University Press, 2009.
Jones, Ronald W. Globalization and the Theory of Input Trade. Cambridge,. Massachusetts, USA: Massachusetts Institute of Technology Press, 2002.
Kaul, Inge, Pedro Conceicao, Katell Le-Goulven, and Ronald Mendoza. Advancing the Concept of Global Public Goods, pages 78-112. Oxford, U.K: Oxford University Press, 2003.
Leamer, Edward. "Factor-Supply Differences as a Source of Comparative Advantage." The American Economic Review Journal Vol. 83, no. Iss. 2 (1994): 436 - 439.
O 'Brien, Robert, and Marc Williams. Global Political Economy. 3rd Edition. New York, USA: Pelgrave Macmillan Press, 2010.
United Nations Industrial Development Organization. Public Goods for Economic Development. Vienna, Austia: United Nations Industrial Development Organization, 2008.
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