Global Issues, Economics

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Free Trade Benefits Developing Countries

Question 1. (Free Trade Benefits Developing Countries)

Trade is the exchange of goods and services from one party to another by use of an exchange value. In most cases, the receiver of the goods or services is referred to as the buyer while the party giving out the goods at a cost is referred to as the seller. Government intervention is sometimes involved in trade and absent in some trade situations. In this case, fair trade is a type of trade in which government intervention is absent. Traders undertake their transaction activities without government interference. The absence of government interference creates a free trade environment, which favors the developing countries over the industrial countries.

Traders from different countries may carry out their transactions without including any government procedures in their transactions. For the last couple of years, there has been a rapid growth in the world economy stimulated by the rapid increase in international trade. It is evident and true that this growth has been triggered by the existence of trade liberalization by both the industrial and developing countries where the poorest countries escape from extreme poverty while also benefiting the industrial countries. This has been caused by the formation of free trade associations, which encourage traders to trade without paying taxes. Traders from different countries exchange their commodities in free trade making the prices for the commodities they buy fair than if taxation had been imposed (June Johnson 139). The economically inferior country ends up benefiting from the economically superior country in the trade because it is able to get industrial goods that lack in their country at a fair price.

On the other hand, the economically inferior country provides agricultural products to the economically superior country hence a free and fair trade between the two countries. The trade associations exist in free trade zones where different countries agree to trade together without government interference. Trade liberalization has both benefits to the exchange of goods and services. In the buying and selling of goods at duty free cost, countries are able to acquire goods and services from each other at a fair price. Global outsourcing of jobs has a great benefit to a country because countries receive cheap services from other countries hence a benefit to them. This has both merits and demerits to a developing country because the countries benefit and sometimes lose in the transaction. Countries that offer unique and high technological services are likely to lose from the free trade of services because they have invested so much in the technological innovations hence offering duty free services to other countries is a loss to them.

According to “Global Issues: Readings for Writing” by June Johnson, free trade benefits developing countries. This is especially in the free trade of services. It includes the offshore outsourcing of services at a fair and free duty cost (June Johnson 274). The industrial countries end up selling their services to the developing countries at the same price they sell to the citizens in their country. The fact that the government has invested so much in providing a good educational infrastructure to its citizens does not mean that it does not benefit by selling the services to other countries. The loss is mostly experienced by the technologically developed country because the less technologically developed countries end-up getting the best out of it. After getting the idea from them, they end up becoming their competitors in the field. It is therefore beyond doubts that developing countries benefit from free trade.

Freeing trade regularly benefits the impoverished especially. Developing countries can hardly afford the large inherent financial backings, often propagated to narrow advantaged interests that trade fortification offers. In addition, the amplified growth that outcome from free trade itself tends to raise the incomes of the impoverished in approximately the same percentage as those of the inhabitants (June Johnson 349). New jobs are availed for unskilled employees, raising them into the middle class. Generally, disparity among countries has been on the decline ever since 1990, reflecting further rapid economic development in developing countries, in part the consequence of trade liberalization.

If all the trade barriers were removed, the industrial countries are likely to benefit by increasing their annual income from 250 billion dollars to 680 billion dollars per year. This is likely to be a great benefit to the industrial country. However, the developing countries are likely to experience twice as much growth as the industrial countries. This shows that trade barriers are an obstacle towards the development of the developing countries hence the presence of free trade is a benefit to many developing countries.

Question 2. Argumentative Response to a Friend

It is true to say that workers experience a hard time in producing quality products that are likely to benefit many people in our community. Personally, I do not feel bad that workers are laboring at life-threatening conditions to produce jeans. I also never wish that if I could change my career and get a part time job, I would change my consumer habits. This is because trade is the exchange of goods and services (June Johnson 328). If the people working at the jeans production centers do not work, I will not get shoes and clothes to put on. I would like to refute my friend’s words that the people in the life threatening conditions should cease being in that career. It is vivid that we are inter-dependent with these people because at some point, I contribute to the consumption. They are likely to buy products from my working station the same way I am likely to buy the jeans. The absence of these people in the industry is likely to cause a big loss to the economy because they contribute to the economic growth of a country.

It is also important to note that people have different tastes in different parts of the world. This means that there are people who prefer putting on the jeans hence it is of great advantage to the producers of the Jeans. It is through their service that other people are able to obtain the clothes hence a satisfaction of a basic need. Jeans are also likely to be sold in the super discount stores at a very fair price hence making them affordable to a large population of people in different countries. Some people find it difficult going for other clothes that go for a higher price than Jeans hence end up purchasing Jeans. This means that price influences the buying and selling of these Jeans. My friend should also understand that all careers are surrounded by risky factors. An example is piloting (June Johnson 290). Airplanes’ crashes take the lives of so many people but still the pilots never cease to fly the airplanes. It is the same way for the people working at Jeans production industries. The pilots buy Jeans from the Jeans production industries and offer transportation of the workers of the industry or Jeans to different destinations.

Retail catalogs are very important when it comes to purchasing of goods and services. In most cases, Jeans products are sold at retail prices. An example is the sweaters and the sneakers that we wear. Retail catalogs are available at almost all shopping malls hence they are referred to as convenient retail catalogs (June Johnson 421). This shows that the Jeans products are included in retail catalogs hence their convenient prices attract buyers to purchase them. It is through this means that buying and selling of the products becomes an exchange of goods and services between different people in the country.

It is also evident that the production of Jeans and the labor force employed at the industries contributes to the economic development of the country. This is because they pay their annual taxes to the government hence leading to economic growth of the country. The government on the other hand uses the taxes too in boosting the economy of the country. It is also evident that Jeans production in the industrial countries leads to development in the developing countries. Most of the impoverished people from the developing countries are employed in the production industries hence earning an income, which enables them to rise to middle class. This shows that the developing countries end up benefiting from the service given by the people working at the industries.

Question 3. Argumentative Strategy of Thom Hartmann

According to Thom Hartmann economic Radio presentations and writings, it is vivid that the presence of trade associations in the United States has led to development of many countries in America. In his political and economic writings, he states that the presence of American free trade association (AFTA) has led to the improvement of many countries in America. Different countries have experienced economic growth in the continent hence a big contribution towards global economic development. He also states that the economic growth of a single country contributes to a global economic growth.

Question 4. Policy Proposal for a Consumer Group

According to Ed Finn’s “Harnessing Our Consumer Power”, it is important to know that most companies harness consumer powers by using the wrong channels to distribute their products to the consumers. This includes the products that are produced and sold at the sweatshops. Many companies aim at selling their products to the rich nations in order to earn big profits from the transactions hence hindering the buying of the local consumers at a fair price (June Johnson 359). It is true that businesses aim at selling their product to make profit but this is unfair to the local consumers. If these products are sold at a cheaper price, they are likely to be sold in large volumes but at a fair price hence compensating for the workers.

It is so bad that the workers at the sweatshops are unable to afford the products available at their working stations. The government therefore must come up with proposals that inhibit such selfish transactions carried out by most export companies. In conclusion, free trade is very important to both the industrial and developing countries hence it should be encouraged as a strategy towards economic development in the world. The developing countries will benefit from the free trade of services especially technological services while the industrial countries are likely to benefit from labor services from the developing countries. This exchange of goods and services will contribute to global economic development with the developing countries benefiting the most. It is vivid that if all trade barriers were removed, the developing countries would benefit as twice as much as the industrial countries from free trade hence an enormous economic growth in the countries. This is because the eradication of trade barriers encourages free trade between different countries hence a benefit to the developing countries.