H-O Model Protectionism

H-O Model Protectionism

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A system of free trade among states increases the possibilities of voluntary exchange and the overall creation of wealth, which would lead to peace. The creation of barriers to trade contributes greatly to inter-country animosity and militarism. Most economists believe that free trade is beneficial to all parties involved. (Free trade promotes peace by eliminating reasons for military conquest, in order to strengthen domestic economy). Through the utilization of Free Trade an overpopulated workforce can be eliminated; thus, saving capital for firms as well as the government. Free trade also allows people and goods to move freely across borders, which creates both a cultural and economic understanding between nations. Free Trade brings comparative and absolute advantages into play. One of the greatest economic trade debates of all time has been the issue of free trade versus protectionism. Proponents of free trade believe in opening the global market, with as few restrictions on trade as possible. Proponents of protectionism believe in concentrating on the welfare of the domestic economy by limiting the open-market policy of the United States. Trade has potential benefits for all nations. Tariffs, export subsidies, and quotas simply interfere with the movement of goods and services around

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