Essay on the Benefits of Free International Trade to the Developing !
The British Colonialism propagated the free trade philosophy in international trade. The classical economists like Adam Smith supported the free trade without any restrictions. The policy of laissez faire is the corner stone of free trade. It is the policy of allowing individual activities (esp. in commerce) to be conducted without government control.
The free trade concept is based on market mechanism which is controlled by the forces of demand and supply in a particular market the government should not interfere in the trade and commerce and what has to do is to provide infrastructure which is necessary for the expansion of market.
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Haberler lists the following benefits of free international trade to the developing and less developed countries:
(1) International trade provides material means (capital goods, machinery and raw and semi finished material) indispensable for economic development of developing countries.
(2) International trade is the means and vehicle for the dissemination of technical knowledge, the transmission of ideas, for the importation of know- how, skills, managerial talents and entrepreneurship.
(3) International trade is also the vehicle for the international movement of capital especially from the North (developed countries) to the South (developing countries).
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(4) Free international trade is the best anti-monopoly policy and the best guarantee for the maintenance of healthy degree of free competition.
(5) International trade lead for division of labour on an international scale leading to greater specialisation, efficiency and economy in production.
(6) Free international trade facilitated with the benefit to the consumers by providing large variety of goods at the cheapest prices.
According to D.H. Robertson, international trade is ‘an engine of growth’. Haberler has argued that international trade has made a tremendous contribution to the South i.e. the developing countries in the 19th and 20th centuries.