3307AFE International Economics: Trade Liberalization vs. Barriers

This report delves into the ongoing debate between trade liberalization and trade barriers within the context of international economics. It begins by defining and exploring the merits and demerits of trade liberalization, emphasizing its role in fostering economic efficiency through specialization, comparative advantage, and access to larger markets, while acknowledging potential drawbacks like structural unemployment and environmental concerns. The report then examines trade barriers, or protectionism, outlining their purported benefits, such as protecting domestic employment and infant industries, alongside their costs, including higher consumer prices and reduced product quality. A comparative analysis is presented, arguing in favor of trade liberalization as the superior strategy for promoting economic growth and efficiency, supported by case examples illustrating the consequences of protectionist policies like the US-China trade tensions. The report concludes by reiterating the advantages of trade liberalization for global economic development and the disadvantages of trade barriers.