In conclusion, free trade is differs from fair trade, therefore, ‘free trade is not fair trade’. In spite of the fact that, Fair trade has shown to improved many lives is continuing to improve peoples in developing countries, we should know that fair trade is not free trade. As time passes, fair trade would soon give way to the natural forces of competition and free market demand and supply that will inevitably improve the economies. All of the above proved that free trade is not fair
We are living in a free market economy age where business entities are engaged in competitive practices. This sometimes (if not always) leads to the monopolisation of the market by way of anti-competitive agreements, abuse of dominance, mergers and takeovers between business entities which result in distortion of the market. Most countries in the world have enacted competition laws to protect their free market economies and have thereby developed an economic system in which the allocation of resources is determined solely by demand and supply. Although the antitrust laws are very much new to the Indian regulatory framework but the western countries likes US and Canada has this kind of regulatory framework since last decade of the 19th century.
They drive the vision and trade policy orientation into liberalism, including Free Trade Area, because trading provides many benefits, such as providing job vacancies that could reduce the number of unemployment. Furthermore, trading helps the producer of products and services obtain resources, especially scarce resources in their countries, provides revenue by exporting, and so on. Nonetheless, the development of free trade policy does not operate excellently, because of the liberalism policy of economy concerning some countries. It has caused some negative impacts, including a discrepancy between developed countries and developing countries especially in this globalization era. Therefore, trade protectionism began to be applied in various countries to minimize the negative impact of international trade.
[44,pp 242-3] The standard case for free trade is based on a number of assumptions and simplifications. Much of the literature ignores the macroeconomic context. For eg. Kaldor argues that the ricardian rationale for free trade is dependent on the assumptions of constant returns to scale. However, the existence of economies of scale in manufacturing means that a nation that is successfully competing in foreign trade can expect that the advantage of an expanding market will increase it competitiveness.
The enabling clause allows developed countries to accord preferential tariff treatment for different categories of trading partners which would otherwise violate Article 1 of the GATT which stipulates that no GATT contracting party must be treated worse than any other. On the other hand, the nature of Free Trade Agreements (FTAs) is inconsistent with the obligations because they grant countries who are party to the agreement more favourable trade benefits than the others. To make sure, these arrangements are trade-enhancing, one such exception under GATT is Article XXIV focusing on special exceptions for FTAs. An FTA is one of the several options available to WTO members wishing to pursue integration beyond that which is possible in a multilateral trade
The increase in transactions between nations also leads to an increase in peaceful interaction and interdependence between WTO members. Peaceful interaction leads to lower trade barriers and creates a transparent trading scheme which leads to growth and development among member states. While many consider the WTO and CA to be central for advancing development objectives, some have argued that there is a darker side of this system in terms of its interrelationship between human rights and market freedoms. Robert Howse critiques the work of Petersmann and stresses how this interrelationship is far more complex than Petersmann understands it to be. While Petersmann proclaims that all comprehensive human rights cannot be held if their market freedoms are suppressed, he
Meanwhile, those with limited and narrow capabilities will find this free trade torturing because they simply cannot compete with the more-advanced foreign markets. Though this concept of free trade is often considered to be a policy which is profitable for certain countries only (especially super power countries) and therefore results to inequality among states, free trade is still no other than today‟s eminent policy among states, because basically, free trade has been deemed as something inevitable and as an absolute consequence of the globalization. However, free trade cannot guarantee a country to be rapidly developed and rich because every country has different characteristics and
Bilateral trade agreements are between two nations at a time, giving them favored trading status with each other. The goal is to give them expanded access to each other's markets, and increase each country's economic growth. This type of trade agreement standardizes business operations, in an attempt to level the playing field and also it keeps one country from stealing the other's innovative products, dumping products at cheap cost or using unfair subsidies. These agreements also standardize regulations, labour standards and environmental protections. Last, but certainly not least, they eliminate tariffs and other trade taxes.
The advantages and disadvantages of free market are necessarily preconditions or effect on each other. It can be argued that free market economy facilitated by globalization in not a perfect concept neither are completely regulated economies, governments should try to strike a balance between free market and the amount of government regulation needed to protect the people and the environment. If the government can strike this balance, the public will be protected and businesses will also
They also contended for special and differential treatment, both through the Generalized Systems of Preferences (GSP) and through the automaticity with which the balance of payment exclusion was used to authorize them to continue relying upon quantifiable boundaries and other protectionist measures. Not all developing countries nor manufactured goods are protected by the numerous preferences provisions. The Most Favored Nations (MFN) provides cuts that would shelter a wider variety of products and certainly would benefit some developing countries currently excluded from the GSP. The MFN tariff reductions also offer more advantageous access to world markets for unrestricted trade volumes (Baldwin & Murray,