Will industrial levels compared to their population. Firstly, benefit

Will
free trade benefit third world countries? Does free trade harm developed
countries?

The
benefit of free trade to third world countries

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In
our opinion free trade is beneficial to the third world countries (developing
countries). It is also called as a less-developed country where country with
low living standards, less developed industrial base and the Human Development
Index (HDI) are lower than other countries. Generally, developing countries are
have not achieved significant industrial levels compared to their population.

Firstly,
benefit of free trade is acts as pacifier for weaker and developing countries.
This act allowing free trade in developing countries makes the economy more
attractive. As we know, free trade is an economic practice whereby countries
can import and export goods without fear of government intervention. For
example, there is no government intervention through the quotas or duties that
people can buy from other countries or what they can produce and sell to other
countries. This can be a key in creating a stimulus that allows a new countries
and declining economies to grow not to stagnate and collapse. Where, developing
countries are can access to enter a new markets since companies do not have to
worry about absorbing tariffs and other obstacles to enter market and they
freely can sell products. Hence, in this way we believe that free trade will
becomes a benefit to developing countries.

Furthermore,
nations can increase the quality of life for their citizens when engaging in
free trade. The European Union actively encourages developing countries to use
trade to build up their own economies and improves living standards. Free trade
allowed them bringing the goods (import) might be less expensive for developing
countries than trying to produce consumer goods or services within their
borders which it can helps to boosting their standards of living. Purchasing
power of individuals will increase if they implement low consumer prices. The
higher of purchasing power allows consumer to purchase more. It will be effect
to national economic growth through the number of consumer purchases. There are
many of developing countries does not have process of production accessible to
convert raw materials into valuable consumer goods. Thereby, with friendly
neighbors usually the developing countries are often doing import of goods each
other. For instance, in 1971 European Union were help developing countries
export to enhance them generates export earnings and promoting their economic
diversity of commodities and raw materials. Therefore, importing from
neighboring countries is ensuring a stable flow of goods available for use.

Other
than that, free trade is beneficial to developing countries in better foreign
relations. A good relationship with foreign country is usually the result of
unintended free trade. The developing countries are always subject to
international threats. Build a strategic free trade relationship with more
powerful and effective countries can help guarantee that developing countries
have additional protection against international threats. For instance, developing
countries are become steadier, more straightforward and more open when
developing countries under the rules-based international trading system in the
World Trade Organization (WTO). Developing countries can likewise utilize free
trade agreements to enhance their military quality and their internal
infrastructure and additionally to enhance politically. Hence, these unintended
benefits allow developing countries to learn and create how they should govern
their economy and what kind of government policy can benefit the people.

 

Free
trade harm developed countries

It
is also harm to developed country. Developed country is known as industrialized
country where the country has a developed economy and advanced in technology
infrastructure compared to other less developed countries. In developed
country, they have low poverty rate which is they living in high standard where
many of people have enough money to buy what they want and need compared to
developing countries.

Instead
of developed country free trade also has disadvantages besides the advantages.
Firstly, the union opposition among them. The North American Free Trade (NAFTA)
between Union States, Mexico and Canada has criticized by unions as they are
harmful to workers and the U.S economy. Since workers paid in Mexico is cheaper
than U.S, many manufacturing industries produce of their production at there.
AFL-CIO contented NAFTA had ravaged workers and consumers in all three
countries, contributing to job loss and salary decline while reinforcing
multinational corporate. Unions argue that when the increasing of capital
mobility facilitated by free trade, it is can hurt the undermined government
regulations and the surroundings.

Next,
disadvantages of free trade can harm the developed countries are the increasing
number of job outsourcing. According to James Bucki (2017), outsourcing is a
business practice used by companies to reduce costs or improve efficiency by
shifting tasks, operations, jobs or processes to an external contracted third
party for a significant period of time. It can happen when tariffs were
reducing on imports it will allows companies to expand to others country.
Without tariffs, the imports from other countries with low cost of living cost
less such as when U.S companies in same industries they will be difficult to
competing. Therefore, the unemployment rate will be increase because country
will import the human resources where country has paid salary more cheaply than
their country. Hence, they might be to reduce their workforce in company. For
instance, many of U.S manufacturing industries actually removed workers due to
NAFTA.

Last
but not least, the difference among economists. The Council on Foreign
Relations (CFR), is an independent think tank based in New York, were reported
that many of economists agree where NAFTA has led to some overall improvement
in U.S occupations, but deep inside of that there was a painful side effects
occur. Free trade can affect the turbulence in the domestic economic sector
such as the old manufacturing segments that has been exposed to the global
competition. As indicated by Edward Alden, a senior officer CFR, salaries are
not defended with labor productivity and rising income inequality-trends have
been hastily diminished by free trade.

To
conclude that, generally, free trade can give the benefits to the third world
country (developing countries) in the process of growing economy and others to
be the better life like the developed country. Where as we know the developed
country have low rate of poverty which is their society living in better life
compare to developing countries. Hence, with the existing of free trade developing
countries will become and improving their life to be better. Other than that, behind
of advantages of free trade, there will have disadvantages. The free trade can
be harmful and it will be affect the growth of country especially to the
economy.

 

The
prospect of free trading in Asia and America

Asia
prospect of free trading

Generally,
free trade is a situation where a government does not interfere to influence
through quotas or duties what its citizens can buy from another country or what
they can produce and sell to another country. Nowadays, Asia has become the
“global factory”. The region with the largest economies such as Peoples’ Republic
of China, India and Japan and the Association of Southeast Asian Nations’
(ASEAN) economies have become key players in Free Trade Agreement activity. The
importance of FTAs to trade at the economy level has also increase as
reflecting the growth of FTAs.

In
addition, with Free Trade Agreements (FTAs) ASEAN companies have great
opportunities. Agreeing FTAs will give a company advantage to pay lower duty
fees. This is because of management in the supply chain and transaction
complexity. In fact, using FTAs will give more opportunities to businesses but
at the same time it also gives pressure. At the same time, all trade agreements
share one similarity which is they expose a company to potential trade
compliance issues. If companies cannot pay for penalties, they will face the
delays or reputational damages. These are just a few effects of violations of
trade regulations.

Companies
are turning into automation of FTA Rule of Origin analysis as one way to ensure
compliance of trade regulation and maintain fully auditable records of every
transaction. These business processes are also proactive and gives “right first
time” information. Compliance professionals focus on looking for new FTA
benefit opportunities in new trade lanes, rather than addressing issues with current
product or trade lane shipments.

Besides,
Asia Pacific region led by the ten members of the Association of Southeast
Asian Nations (ASEAN) is one part of the world looking to take a leadership
role. In 2014, its total GDP reached US$2.6tr and that positioning it the
seventh largest economy in the word, while its total trade was US$2.5tr and the
majority of it was intra-ASEAN trade. In the near future, Asia has a few number
of new and existing trade deals in the works to increase imports and exports. All
of the trade deals are created to increase further growth and cooperation
across the region. As example, China’s One Belt, One Road (OBOR), is an
economic and diplomatic initiative that could improve trade. China’s OBOR
initiative objective is to improve trade relationship with ASEAN, Middle Eastern,
and European countries. By building high-speed trains and highways through international
geographic corridors, it can connect China to the world.

According
to Reuters, when talking about trade deals, China, Japan and South Korea are
already discussing a trilateral trade agreed to refuse all forms of
protectionism, and they are taking a stronger stand than G20 major economies
against any US protectionist policies. Although TPP (excluded China) was
negotiated, one more extensive trade agreement has been under discussion. Since
2012, the Regional Comprehensive Economic Partnership (RCEP) agreement has been
negotiated by China and 15 other Asia Pacific Rim countries. RCEP consist of
ten members of ASEAN. They are Vietnam, Thailand, Singapore, Philippines,
Myanmar, Malaysia, Laos, Indonesia, Cambodia and Brunei. It’s also includes China,
India, Japan, South Korea, Australia and New Zealand, who are their trading
partner. Total trade with China amounted to US$345billion in 2015, showing 15.2
per cent share of total ASEAN trade in that year, according to data provided by
the ASEAN website. RCEP could transform the region into a market representing
US$22tr in economic activities and of the world’s population if it is implemented.

Asia’s
trade will continue to expand and grow if they are in the right trends. To
promote international trade and create a region that is a true global trade
leader, this region has a number of new and existing trade agreements in right place.
By getting the basics right in an easy and timely manner to maximize the cost
benefits of FTA usage, companies will get advantages from modernization of
their own trade processes.

 

 

 

 

 

 

America
prospect of free trading

As
there are many fans of NAFTA, there must be a lot of critics on it too. Those
who are agreeing with the agreement would say that issues like an establishment
of trade standards, protection of intellectual property rights, and opening up
of new opportunities. Those who are against the agreement in the U.S. have pointed
out that jobs opportunity have actually been lost and been moved especially to
Mexico.

14
free trade agreements have been made by United States with 20 countries. It is
including Canada and Mexico with NAFTA and the others include individual
country agreements and a collective one with six Latin American countries:

–         
Asia Pacific Region which are Australia,
South Korea and Singapore

–         
Middle East And North Africa which are
Jordan, Bahrain Morocco and Oman

–         
South America which are Chile, Colombia
and Peru

–         
Central America with Dominican Republic
Free Trade Agreement (CAFTA-DR) which is includes Costa Rica, the Dominican
Republic, El Salvador, and Guatemala.

With
all the 14 different free trade agreements, all of them have a common goal to
be reached. All the agreement created is to reduce trade barriers and create a
more stable and transparent trading and investment environment. This will give
opportunity to American companies to export their goods and services to the 20
trading partners with reduced trade barriers. At the same time it is making
American as exporters competitive in those markets. In 2015, nearly half which
is 47 per cent of United States goods exports went to the 20 free trade
agreement countries. According to the International Trade Administration’s
website, the total of United States merchandise exports to the partner
countries is $710 billion.

In
total during 2013, South Korea is the sixth-largest goods trading partner with
$104 billion in export and import trade. With regards to foreign direct
investment (FDI), South Korea in 2014 was the tenth-largest FDI country into
the United States. Many may argue on this free trade agreement or commonly
known as KORUS FTA, but now Korea showed themselves up as a major trading
partner with the United States. It remains debatable if the free trade
agreement has helped or not, but, after it went into effect in 2012, there have
been increases in trade between both nations.

The
next worth for mention is CAFTA-DR. It is represents the first free trade deal
between the United States with smaller developing economies. None of the
countries can be a key trading partner at the first place, but when combined, they
represent a major player in trading. CAFTA-DR is 16th-largest goods partner for
the United States with $53 billion import and export trade. This clearly has
made United States as exporters and importers much more competitive in the region.

Referring
to the proposed of new free trade agreements the U.S. involved with, there are
three visible ones that have been showed up in media. First is there is the one
with the EU called the Transatlantic Trade & Investment Partnership (TTIP).
Second is the Trade in Services Agreement (TISA), which would liberalize trade
with the majority of economies with respect to services industries, including
the EU, Japan, Canada and some Latin American countries which are Peru and
Chile, Australia, New Zealand and Pakistan. Finally, there is the Transpacific
Partnership Agreement, or known as TPP/TPPA, which includes 12 countries: the
U.S., Canada, Australia, Brunei, Chile, Japan, Mexico, Malaysia, New Zealand,
Peru, Singapore and Vietnam.

In
conclusion, Asia prospect of free trade are progressively aim for improvement
in their trading and at the same time trying to protect themselves against any
United States protectionist policies by taking a stronger stand than G20 major
economies. Besides, in America they are in their line to increase their export
and import trading using FTAs with countries that have high potential level in
trading.

 

 

 

Link between free trade & economic
growth

There was a strong interrelationship between the development of free
trade and global economic growth. To achieve successful growth, the periods of
five years or more years during an average of economic growth in country rise
to 4 percent or more after regulate inflation. In today century, there was many
countries have made a great achievement towards prosperity just in a short
time. For example, in the second half of 20th century, Republic of
Korea has made an amazing progress when they taking the advantages of
opportunity in inventing new technology and an open world market. The growth of
economy in Republic of Korea hit to the peak when they started to trade with
other country. It same goes to China which recently was known as the most
populated country in the world. The sustained growth in China was one of the
fastest in the world plus China will become the second larger economy in the
world within ten years.

Basically, based on free trade, a global citizen was given a freedom to
maximize their economic interests as consumers, distributors and producers
without interference of governments. It is means that, where a country
implement free trade it will enables consumer voluntarily buy long lasting,
affordable or sustainable high quality products from manufacturers in and out
of countries. It is because the products that companies produce might be less
expensive with the existing of free trade which is consumer do not worrying
about tariffs. Hence, purchasing power of household or consumer will increase
if company implement products with low price. A part from that, it will affect
to national growth of economy through the total number of individual purchase. Thus,
the globalization of economic forge entrepreneurship, economic growth and
innovation within a global society.

According to the article from Baruti Libre Kafele, we can say that the
arise of job created than job lost may define there’s a link between free trade
and economic growth. In United States, manufacturing output has increased by
40% in the past 20 years. The economy in United States produced twice as many
products as they have done in any year since 1984. As Adam Smith indicated that
he is argued where the increasing of specialisation and division of work, international
trade would quicken economics growth of a country, the effect of the free trade
on financial development has been carefully analyzed. In literature of theoretical,
Grossman and Helpman (1991) and Chang et al (2009) examined the benefits of
issues of how free trade will affect economic growth. However, ethical
theoretical growth is of the opinion that human capital can increase the
economic growth after free trade is implementing. For example, the agreement of
trade between U.S – Korea, it is a historic opportunity where it can boost the
number of exports and create employment support in America and also to boost
U.S economic leadership in the Asia Pacific area. So, essentially it shows a
good relationship between free trade and economic growth.

                Besides that, the EU free trade policy moves towards to new emerging market
economies brings the prospect of Union growth and trade opening possible. In the
future 2020, the International Monetary Fund (IMF) approximate that as much as
90% the growth of economic will be collected and generated in the future
prospect outside of Europe. Free trade is enables either developing or
developed countries to enter market