Protectionism and Free Trade Principles of Economics Research Paper

Download this Research Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Research Paper:

Protectionism and Free Trade

Principles of Economics:

A Discussion on Protectionism and Trade Liberalization

Rich nations make the rules. This comes as no surprise: Since rich people have significant power in their own nations it is to be expected that the rich nations should have analogous power in the world system. Just as surely as rich nations hold the balance of power in the world, it is just as certain that when they use this power it may or may not benefit developing nations. At first such power on the part of the developed nations is likely to seem blatantly unfair. However, the debate about the relative power in the world today between rich and poor nations is more nuanced than that: While wealthy nations may or may not make choices that are most beneficial to developing nations, it is also the case that developing nations can and often do make very poor choices for themselves -- choices that are generally considered to be poor by leaders of both the developed and the developing world.

Leaders in both the developed and developing world debate how international power should be apportioned: Should rich nations (which may be argued to have a high level of expertise) make decisions for poorer nations (which may not have the experience to make good long-term economic decisions) or should poorer nations have the power to make decisions for themselves, even if those decisions are misguided. One of the complexities involved in posing such a question, much less in attempting to answer it, is that implicit in the question itself is the idea that the developed nations have the right to be considered as part of the possible solution to the developing world's economic problems.

Beyond this debate over which nations should have the power to set policy for developing nations is the question of what would be the most appropriate methods for rich nations to use if it is indeed they who are to control the system. The most often used and most highly vaunted system until now is that of trade liberalization, especially when it is conducted through the kind of financial policies as those involving International Monetary Fund (IMF) loan programs. Under current IMF regulations, developing nations must abide by numerous and quite rigorous criteria before they can even begin to start the qualifying process of joining the rich nations' club: The ways in which developing nations are vetted by the IMF and wealthy nations can be overwhelming to developing nations that lack all of the economic and political institutions of the First World as well as the general societal stability of the developed world.

The gatekeeper for this process of receiving financial aid (primarily in the form of loans but also in direct grants and other forms of aid) is, of course, the International Monetary Fund. One of the main functions of the IMF is to ensure that developing nations comply with trade liberalization requirements, first, to qualify for financial aid or loans and, second, to have a reasonable chance of receiving them. Many critics of the IMF -- from both rich and poor nations -- argue that, regardless of intent, this policy is unfair to some, especially in light of the history of developed countries that relied on protectionist measures when they were in their own developing phase. These critics reasonably ask whether trade liberalization is, in fact, something that all nations must undertake. Given the unique structures upon which every country is built, and the different historical moments in which they develop, can there reasonably be any set of criteria to which each nation should submit?

This paper will analyze the various 'hoops' through which developing countries must jump in order to meet the standards imposed upon them by the developed world. Having examined the political, economic, and structural procedures, the paper with then analyze whether current trade liberalization policies are fair and ways to improve them in terms of the overall world-systems justice and the future relationships among the world's nations, and if so, to what extent. The descriptive phase of the paper includes, first, a history of the economics of trade will be described with an examination of several of the most important theories that have been developed to explain this sector of human economic activity.

The next section provides a short description of…[continue]

Cite This Research Paper:

"Protectionism And Free Trade Principles Of Economics " (2012, March 29) Retrieved October 21, 2016, from

"Protectionism And Free Trade Principles Of Economics " 29 March 2012. Web.21 October. 2016. <>

"Protectionism And Free Trade Principles Of Economics ", 29 March 2012, Accessed.21 October. 2016,

Other Documents Pertaining To This Topic

  • Protectionism and Free Trade Principles of Economics

    Protectionism and Free Trade Principles of Economics: A Discussion on Protectionism and Trade Liberalization In the convoluted world of discussion over the future of developing countries, rich nations seem to make all the decisions, regardless of whether they benefit or harm the former group, or so it seems. This supposition is debated heatedly by those concerned and by external actors, especially when it comes to deciding whether trade liberalization is the right modality

  • International Relations Free Trade Right

    The current model is threatened as well by a couple of its more glaring imperfections. The two largest players in the WTO have forged their ideas on free trade based on entirely different approaches to the issue. The U.S. has forged its own trade policy based on bilateral agreements and leveraged its economic might to operate almost independently of trade bodies. The EU, on the other hand, has built a

  • Free Trade Regime on the

    Future reductions in trade barriers across the world grant the American farmers, ranchers, manufacturers, and service providers a better access to the 95% of the world's customers. This would obviously lead to an even greater economic growth determined entirely by free trade. The United States economic growth is generated by the healthy export activity. The U.S. goods and services exports covered 10.45 of the GDP and 20% of overall growth

  • Adam Smith s Free Trade in Wealth of

    Adam Smith's Free Trade In Wealth of Nations, Adam Smith recognized that human beings have a natural propensity "to truck, barter, and exchange one thing for another." Smith saw the free trade of goods across borders as an extension of this human instinct. People exchange products and services as "free agents" in pursuit of their own individual interests. In the process, people become part of an international economy, connected across

  • Global Community Free Trade Impacts

    For example, improving the plight of women and especially poor women is a key goal. Excluding fifty percent of the world's population from participating fully in the global economy makes no sense from a purely economic point-of-view. Founder of Grameen Bank Muhammad Yunus is at the cutting edge of improving the global economy by directly helping women via micro-lending. Progressive economic models like Yunus' will go a long way toward

  • Trade Liberalization

    Trade Liberalization In basic terms, trade liberalization has got to do with bringing down the various trade limitations existing between countries. It is important to note that in an attempt to protect their domestic industries, many countries from across the world have in the past erected numerous protectionist measures including but not limited to tariffs and quotas. This has amongst other things had the effect of stifling international trade. This text

  • Economic Miracle Japan 1946 1973 Japan

    Energy costs increased substantially and the yen's exchange rate was shifted to a floating rate. The eventual recession reduced expectations of future growth and reduced private investment. Economic growth went down from 10% to 3.6% during the period 1974-79 and to 4.4% in the decade of the 80s. But despite the oil crisis and its consequences, Japan's major export industries stayed competitive through its cost-cutting policy and increasing efficiency.

Read Full Research Paper
Copyright 2016 . All Rights Reserved