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Free trade or protectionism?

There were always misunderstandings in trade policy, people were most interested in the following direction. Why are those states that have huge resources, are poor before our eyes, and others that have only human resources, are rich and, and quickly. This issue is one of the most difficult, but at the same time, interesting problems in the international economy. Within the economy, scientific trends have emerged - protectionism and free trade . A supporter of free trade argue that a hundred structure of imports and exports should form a market. And supporters of protectionism believe that the state should protect domestic producers from interference from foreign competition.

Free trade is a principle that provides for the exchange of goods and services between countries, freed to the maximum extent from customs duties, tariff and non-tariff barriers. The international economy, although it can achieve an effective allocation of its resources, a high level of its material condition, is due to free trade. But, nevertheless, free trade faces a huge number of problems:

- it is necessary to provide defense. This direction, though, refers more to military-political life, but this argument must also be fulfilled from the economic side. In this case, the branches that are associated with national defense are supported by the government. And this, in turn, is the most basic reason for protecting domestic industries. This phenomenon entails great economic and social costs, which fully justify such a notion as the need to strengthen national security.

- it is necessary to increase internal employment. As many advocates of protectionism say, with its introduction, new jobs are created, while free trade can lead to unemployment. But, in fact, free trade only changes the type of employment, and does not lead to a reduction. But all the same, free trade can reduce the demand for goods of some domestic producers, and this leads to unemployment in the industries. Resources are limited and those resources that are not used in full, still do not remain unattended. It is necessary to conduct a good tax and monetary policy.

- it is necessary to conduct diversification for the sake of stable operation. Trade barriers may be necessary for diversification, which can protect the domestic economy from being influenced by political international events. Also, diversification contributes to a decline in production outside the home country, provides stability within the country. But the economic costs in this case are also inefficient and huge.

- It is necessary to protect young industries that have not yet been able to reach economic proportions. In this case, we offer protection from competition, which may come from other countries.

- It is necessary to apply cheap working foreign power. Many argue that with the help of protectionism it is possible to protect domestic workers and firms from competition, which comes from all sides, in which wages are much higher. If you do not take protective measures, domestic workers can receive the same low level of wages as those who work in a less developed country.

In general, the term free trade involves several areas:

- improving the welfare of nations, where the international specialization of production is applied;

- improving the quality of products as a result of increasing international competitiveness;

- optimization of the process of resource allocation;

- promoting international concentration of output and production of goods.

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