Comparative Advantage

Paper Summary:

The notion of 'comparative advantage' states that countries prosper first by taking advantage of their assets in order to concentrate on what they can produce best and then by trading these products for products that other countries produce best. In order for this liberal trade policy to succeed, international trade in general must be itself liberalized. This paper assesses how the General Agreement on Tariffs and Trade (GATT) and its successor the World Trade Organization, have fared in this task, with particular reference to the developing world.

From the Paper:

"The mercantilist idea of protectionism ultimately leads to bloated, inefficient producers supplying consumers with outdated, unattractive products. However, liberalising trade tends to lead to sharpening competition, motivating innovation and breeding success. One such policy is the transparency of governments' trade policies, as sometimes promising not to raise trade barriers is just as important as lowering them. This is because the promise allows businesses a much more transparent view of their future opportunities and hence liberalise trade."

More papers on Comparative Advantage:

• Term Paper # 121744 : "Comparative Advantage and International Trade"
• Term Paper # 127036 : "Comparative Advantage"
• Term Paper # 122216 : "Comparative Advantage"
• Term Paper # 57210 : "International Trade Theory and Comparative Advantage"

APA Citation:

MLA Citation: