Importance of Free Trade Essay

583 WordsMay 18, 20133 Pages
sufficient and avoiding the unfair competition of low-paid foreign workers? According to Livingstone (2011), the major advantage for Countries that participate in international trade is that international trade enables the participating Countries to maintain some kind of comparative advantage in their ability to produce a good or service. Comparative advantage is a Country’s specialization in producing a particular product. When two Countries with comparative advantage come together in international trade, it stimulates domestic and international trade thereby, increasing wealth for the two participating Countries. Unites States Antagonist of international trade argues that international trade has the potentials of marginalizing the earning power of individuals in the Country given the lower earning power of their Chinese Counterpart (Blinder, 2008). Contrary to this argument, specialization increases earning power and creates jobs. 2. If our country can make everything better and cheaper than foreigners, why would we have any reason to be involved in international trade? Though the Unites States or any given Country might be able to produce most products that she needs, one can argue that not engaging in international trade and allowing specialization will be inefficient even if the country can make everything better and cheaper. Livingstone (2011) posits that it is better for Countries with comparative advantage in every product to concentrate on producing those goods where its comparative advantage is greatest, while importing those goods where its comparative advantage is lowest. Blinder (2008) supports Livingstone’s position with the illustration that attorneys who can type better than their secretary would be doing their legal practice a disservice if they decide to do their own typing. The legal practice is better off when such attorneys concentrate on

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