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Article: What is free trade? Where is trade free?(Reflections)
- Article from:
- UN Chronicle
- Article date:
- September 1, 2004
- Author:
CopyrightCOPYRIGHT 2004 United Nations Publications. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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What is free trade? In our Economics 101 courses, we learned about the benefits of free trade. Based on Ricardo's insight regarding comparative advantage, we would be better off if we focus on what we do best and exchange things. In terms of material wellbeing, we would then be better off than if we isolated ourselves and tried to do everything on our own. Under the principle of comparative advantage, the factors of production--land, labour and capital--should be allocated in accordance with market forces, so that they are used most efficiently. This efficient allocation of resources would produce the greatest overall benefit.
In Economics 101, we learned some ...