What are the pros and cons of worldwide trade liberalization?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The major pro of worldwide trade liberalization, at least according to economists, is that there will be more total output for the world as a whole.  This will mean that people around the world will, on average, come to enjoy a higher standard of living.  This will happen because liberalization will allow countries to specialize in producing things for which they have a competitive advantage.  This will allow more total products to be produced.

The most likely con of worldwide trade liberalization is that some sectors of the economy in some countries will be badly harmed by competition.  This has already happened in rich countries like the US.  We can see that the US manufacturing sector has been hollowed out because of competition from countries where goods can be manufactured more cheaply.  The same sort of thing can happen to farmers in developing countries who cannnot compete with the mechanized farming that is done in rich countries.

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