{"id":147454,"date":"2021-11-18T20:11:19","date_gmt":"2021-11-18T14:41:19","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=147454"},"modified":"2021-11-19T11:13:06","modified_gmt":"2021-11-19T05:43:06","slug":"why-we-must-trade-freely","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/why-we-must-trade-freely\/","title":{"rendered":"Why We Must Trade Freely"},"content":{"rendered":"\n<p><strong>News: <\/strong>Economists view trade openness as one of the most critical elements in a country\u2019s development policy.<\/p>\n<p><strong>Why India should review its trade protectionist policies?<\/strong><\/p>\n<p><strong>The principle of comparative advantage<\/strong>: Freeing up trade moves a country towards specialization in products. This encourages the country to move towards products with low output costs and move away from comparatively costly products.<\/p>\n<p><strong>Benefits of economies of scale<\/strong>: Open Trade allows each country to specialize in a handful of products. In doing so, it allows each country to take advantage of scale economies and lower the costs of production of products it continues to produce.<\/p>\n<p><strong>Trade serves as a medium to access the most productive technology worldwide: <\/strong>For instance, the technology embodied in imported machines or imported products can be accessed by reverse engineering.<\/p>\n<p><strong>Exposes a country\u2019s entrepreneurs to compete against the best in the world<\/strong>: Such intense competition keeps them competitive and offers an opportunity to learn from their peers.<\/p>\n<p><strong>Free trade benchmarks the economy against the best in the world:<\/strong> Exposure to the best in the world is an effective instrument of exposing domestic-policy distortions and poor infrastructure. It can help to identify the changes needed in its domestic policies, regulations, and infrastructure when the country is non-competitive.<\/p>\n<p><strong>Access to the global supply chain<\/strong>: Due to advances in transportation and communication technologies, and technological advances, product innovation, product design, and production and assembly can all take place in different locations based on cost advantage.<\/p>\n<p>For example, a country that is rich in human capital is can focus on innovation and design, leaving manufacturing of components and assembly to countries that have a cost advantage in those activities.<\/p>\n<p><strong>Source:<\/strong> This post is based on the article \u201c<strong>Why We Must Trade Freely<\/strong>\u201d published in ToI on <strong>18th November<\/strong> 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>News: Economists view trade openness as one of the most critical elements in a country\u2019s development policy. Why India should review its trade protectionist policies? The principle of comparative advantage: Freeing up trade moves a country towards specialization in products. This encourages the country to move towards products with low output costs and move away&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/why-we-must-trade-freely\/\">Continue reading <span class=\"screen-reader-text\">Why We Must Trade Freely<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216],"class_list":["post-147454","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700778445,"cached_date":1704942355},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/147454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=147454"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/147454\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=147454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=147454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=147454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}