The Downside Of Increasing Trade Liberalization Economics Essay

The trade liberalization have been accelerated a great deal in the resent years, some countries assume that the lower barrier of trade will improve the efficiency of current economic climate. But does it certainly gain the development of all economy? Within the global view the international trade really can decrease the chance cost, but if we look specific into a certain country, it might not true. THEREFORE I think the acceleration of trade liberalization have somehow limited the development of overall economy of some countries.

First let's look into the developed aspect on earth. Just one single month ago the united states and China was about to deal with an exchange rate warfare. The root of this issue is merely because the low trade barrier got damaged American market. In America, the imported manufactory goods are dominate the market due to cheaper labor force in producing countries like China, India and Mexico. The manufactory industry in US was harmed a lot in this competition. (Wang Ping and Zheng Zeyu, 2009)The unemployment possessed increased in due to this problem. And the ones unemployed employee in manufactory sector can barely change into other sectors due to lower education. (Joyce P. Jacobsen, 2007) So the destruction US get from the earth trade is highly complex. That is why US want to resolve the condition by preparing higher tariff or make Chinese authorities to revalue RMB. It really is will have bad bring about attaining free trade. But also for defending the right of labor US authorities rise this issue in this way.

Besides this point, the against the law goods export are more easier since the trade liberalization, because those unlawful goods like medicine can conceal in the huge amount of other good or the low barrier make the custom careless in the import products. Because US allowed 9500 companies' trail go over the border between US and Mexico free of charge from 2001. Because those songs only have to stop 20 second at the boundary some medicine smuggler use this benefit to export drug into America. Until this past year, the police have found this business. (Washington Time, 2009) This kind of situations will also become popular because the trade liberalization increased. It'll affect mainly the developed countries, because almost all of the countries that produced a lot drugs are developing countries like Mexico, Myanmar and Vietnam. So it is a large downside of free trade too.

Some destruction that induced by increasing trade liberalization also affect producing countries economy too. As the video we see in the course, most researchers thinks that the entire world trade can help developing countries a whole lot. But in the other hands, the increasing trade liberalization will form the overall economy in expanding countries within an unhealthy way. Because of that in the world trade, only if they got comparative advantage in a few types of goods the can benefit themselves. So most producing countries are concentrating in manufactory. Most labor force in expanding countries is in manufactory sector. Even export manufactory can get great deal of great benefit for the united states from world trade but also for the development of a country it might not exactly a good way. A health country should balance the development, if over centering in a single sector will allow economy damage adaptability. For example, China is facing such an issue. More than a 50 % of the GDP of China is exporting the manufactory product. When US planed to increase the tariff against China, there is a stress among enterpriser in our country. A good 3% increasing in tariff will make the clothe manufactory loss all the earnings in export. So we see that there surely is an implicit threaten for these over specialised producing countries.

The other problem cause by the trade liberalization is the use of characteristics resources. On the globe trade, a different type of good that expanding countries export a great deal is the natural resources. The woods and coal will be the very important resources in creation. Most developed countries especially US and Japan always try to avoid using those resources of their country. Shan Xi, the main coal supporter of China, export large amount of coal to other countries every day and mainly to Japan. A whole lot of those coal mines are owned or operated by individuals (largely outlawed), those owner will not consider the trade issue in a worldwide view, instead they only give attention to the eye they get from the illegitimate coal trade. (Jizhe. cc, 2009) These kind of resources aren't infinity so most smart governments have plan about how to using these types of resources. For those poor countries that get money from selling natural resources, may suffer a scarcity in the foreseeable future. And those illegitimate trades of coal or engine oil will take benefits since the trade liberalization improved.

The third point that trade liberalization will damage producing countries is the pollution. Most developed countries put their high tech goods on the globe market or they just sell the patent. Most big amount of creation work were in expanding countries where acquired cheaper labor causes. Then your pollution in expanding countries became a large problem. As we mentioned previously in this semester, the most increasing countries were in industrialization, they get most benefit in producing large amount of manufactory goods. But those work are producing a whole lot of pollution inside the country. And in the environment change issue developing countries become the sinner. So the highly focus become an environmental problem for producing countries too. And the necessity of limiting the greenhouse gas or other pollution gas, have some how limited the development of those countries too.

In my opinion, both developed and producing countries have somehow negatively damaged by the accelerated of trade liberalization. Regarding to Paul A Samuelson, the free trade will injure one side between the countries. Free trade can benefit the entire world a lot in theory, but it addittionally brought a whole lot new problems for countries' development. However, the free trade just at the start so if we wish it certainly help the development of every countries, it need a long time observation and research.

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