Debate Coursework Example | Topics and Well Written Essays - 750 words

Debate - Coursework Example The debate that has been taking place for several years in the case of international trade is whether free trade should be encouraged or nations should adopt trade policies. Free trade is more beneficial for a nation than adoption of trade protection policies because free trade leads to increase in exports of developing regions and it even leads betterment of the living standards of people living in developing nations. Body Restrictions on trade levied by governments in order to protect local organizations should be removed since such restrictions harm local organizations and free trade assists local organizations in development and increases exports. According to Vernon, organizations first develop a good or service for their own domestic region and later when the product becomes highly popular, they tend to develop these products in other nations that are equally developed as compared to the host nations, later when the competition between the same products produced by developed na tions elevate, the manufacturers tend to start producing the same product in under developed or developing nations (PENG, 2009, p.156). Goods are mostly produced at lower cost in developing regions, due to this, citizens and businesses of developed regions purchase the same goods from developing regions. For example: the photocopier machine was first produced in the region of United States and they used to export them to developed regions such as Japan and Western side of Europe, later due to increase in demand, these photocopiers were even produced in these developed regions with the assistance of joint ventures between host nation organizations and organizations in United States (Steers, 2006,p.37). Later the photocopier was even produced by competing organizations in Japan and Western Europe which leads to a decline in imports of US produced photocopiers. Due to this, organizations in developed nations started looking towards producing photocopiers in developing nations in order to reduce production cost. When photocopiers started being manufactured in developing nations, organizations in developed nations started importing them from developing nations. Free trade can assist in solving the economic issue of scarcity for both developing and developed nations; due to this it should be promoted. Certain nations have abundant amount of certain resources and skills, while other nations may experience a scarcity of those resources and skills. The comparative advantage theory of Ricardo states that nations should produce more of those goods for which they have more resources and can produce them in an efficient manner (PENG, 2009, p.152). If one nation experiences scarcity of certain resources and cannot produce certain goods and services in an efficient manner, they will end up experiencing a shortage of those goods and those goods will no longer be in the reach of all of the citizens of a nation and will only be accessible to those who have more money. A major b enefit of free trade is that it leads to decrease in prices of goods and services for consumers and goods become easily accessible. Due to this nations should concentrate on producing more of those goods that they can produce efficiently and exchange them with