Prompt #6 : Evaluating Sources

              

           Is trade good? Some people keep arguing that trade is not good for the economics. They said that trade can make the economics of a country worse off. If trade happens, domestic product would have rival in selling their product. People will have a lot of choices and thus they will pick the products that give the best price. Besides, unemployment will increase because domestic businesses would not require too much employers since they do not need to produce more output. Other than that, trade would require the country to have trade restrictions like tariffs and quotas that would be a threat. It is because tariffs and quotas can be used as bargaining chips in International negotiations.  

       They also said that is it unfair to have competition with other nations because they do not apply the same rules and same cost of production. As an example, China products must be cheaper than US products because the cost of production is much lower and thus people would willing to spend their money on China products. US businesses would feel unfair since the currency in US is higher than China’s currency. Plus, China is labor intensive country so they do not need to invest more money for buying capital in order to produce output. In contrast, US is capital intensive country so they need to invest more money than China to buy all sort of capital in order to produce goods.

                                                            Labor intensive in China

   

 Based on my thoughts, I think that trade is good. I don’t say that all the points above are wrong but I support trade to happen between the countries. It is because trade can fueling economic growth, supporting good jobs at home, raising living standards and helping people provide for their families with affordable goods and services (Benefits of trade). People could choose any products that they want depending on their needs because trade encourage every businesses to make diversity in terms of products that they sell. Competition between the products also can helps each country to be better.

Besides, trade encourages businesses to invest and in the long run, they can get the best outcome. Simply, by participating in international markets, countries are exposed to other countries's techniques, and have an incentive to copy and improve on them (Why trade is good for you?). In conclusion, I really encourage trade to happen between countries because we can find a lot of advantages as I mentioned above. Hopefully people could recognized the power of trade in order to achieve the developed countries. 

By: Syarah Alya

Sources: 

"The Arguments Against Free Trade", by Jodi Beggs.
http://economics.about.com/od/international-trade/a/The-Arguments-Against-Free-Trade.htm

"Why trade is good for you?" The Economists, Oct 1st,1998, From the print edition.
http://www.economist.com/node/605144

"Benefits of trade" Office of the United States Trade Representative , Executive Office of President.
https://ustr.gov/about-us/benefits-trade