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Is free trade always a good thing?


What are your countrys major imports and exports? Do you think products made in your country are better than products made in other countries?

To my mind, nowadays there are some main exportable and importable goods, services and techniques in the world. Export and import depends on government policies (for example, protectionism or laissez-fair) and opportunities of the country.

Russia has a big territory and is rich in natural resources. Bowels of our country contain almost all elements of the table of Mendeleyev. Russia is one of the largest exporters of oil in the world. Incomes of its export make almost 80 % of the state budget. Oil is not a unique resource which we have. Besides oil our country has the world's largest stocks of gas. For example, such company as Gazprom pays one billion rubles of taxes in the budget of the country every day. Metals are the other exportable natural resources and give good return on money, which is invested in their production. But dont forget about wood. It is a great resource,

As everybody knows Russia is a developing country, so the manufacturing industry is poorly developed. Therefore Russia is able to export only raw materials. Such countries as ours are called primary appendages. However the military-industrial establishment is really developed and our country exports its products.

As stated above manufacture in Russia is poorly advanced, therefore the goods made in our country are lower quality, than the foreign goods. Thus in a daily life we consume a great number of the import goods.

Feature of the Russian goods is that they have rather low price, because there isnt customs for it, and a lot of consumers are ready to buy out national products, because they havent got enough money for foreign goods (there is a low Gross Domestic Product per capita).



Is free trade always a good thing?

Free trade can be efficient in one case and unsuitable in other. It influences the economy beneficially only in case of correct and carefully thought over government policy.

Correct policy is impossible without protectionism and subsidize. Protectionism is an economic action when the state introduces high customs on those goods which import government wants to limit because of their high competitiveness concerning domestic substitutes. It is made to protect certain industries and allow them to develop stably. It is really necessary to protect the strategic industries, because important techniques can be used by the other countries. "Subsidize" is government subventions gives to poorly developed branches to support domestic. In general the government subsidizes the infant industries, because at the beginning of their development they can be competitive.

Danger of free trade consist in that when the government doesn't make these arrangements it can lead to that the import goods will supersede domestic from the market. That is consumers will purchase mainly foreign goods, so they wont invest their money in the domestic industries and the national economy will fall into decay.

Such economic principle as "laisser-faire" in this case is not pertinent, it is changed by protectionism and backing poorly advanced branches.


Date: 2015-12-11; view: 4011

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