Free Trade | Economics for GCSE/IGCSE - Year 11 PDF Download

Introduction

• International trade encompasses the exchange of goods and services between countries.
• It involves the movement of goods and services through both exports and imports.
• Trade is considered "free" when there is minimal government intervention, such as quotas or taxes, aimed at restricting or influencing trade flows.

The benefits of free trade

• Greater variety: Access to a broader range of goods and services enhances living standards.
• Lower costs: International competition drives prices down, enabling households to afford more.
• Global collaboration: Trade fosters better international relations, reducing hostilities.
• Knowledge exchange: Trade facilitates the sharing of innovative ideas and technology across borders.
• Resource accessibility: Increased access to raw materials boosts production output and reduces production costs.
• Enhanced efficiency: International competition promotes the emergence of the most efficient firms, optimizing global resource utilization.
• Economic expansion: Exports play a crucial role in many countries' GDP, driving economic growth.
• Socioeconomic progress: Increased output lowers unemployment rates, leading to higher incomes and an improved standard of living.