International Trade
International trade is concerened with the buying and selling of goods & services across international boundries.
There are many gains from trading internationally and many countries rely on it, for example, many countries rely on imports from other countries such as raw materials and foodstuffs that they cannot produce themselves, they also rely on exporting their products. International trade allows this to happen by giving different nations access to the goods & services they cannot provide/produce themselves.
International trade also encourages specialization to take place in the market, this is where one country can produce one commodity better than another’s and therefore specializes in producing that commodity. This allows the product to be produced to a higher standard at a lower cost per unit thus allowing everyone to benefit from economies of scale.
International trade also allows consumers access to a greater variety and number of products at lower prices.
Free Trade
Free trade is a 17th century idea that all nations should be able to trade with one another without having any barriers to the market.
Although free trade has developed since the 17th century and to date has been achieved, it is only achievable inside trading blocs between certain countries, such as, the European Union. Despite all of the arguments for the advantages of free trade, governments often restrict it by imposing protective measures such as tariffs and import quotas. These barriers stop the free movement of goods & services between different countries, raise the price of imports and raise revenue for the government. However many people disagree with these barriers and trading blocs can be agreed upon to h ...