International Trade and Comparative Advantage

International Trade and Comparative Advantage

While I have been studying economics this semester I constantly learning new theories that change the way I comprehend and feel about numerous economic topics and issues we face every day. One subject that can definitely lead to debates is how people feel about free trade. Even though there are numerous advantages to free trade for economies, several individuals argue how free trade is costing our country employment, proceeds, along with impacting the countries culture. So far from what I have learned and studied this semester I would have to say my opinion about free trade has changed and I believe free trade is valuable to the economy.

I would have to say one of the ultimate benefits that an economy can take an advantage of free trade would be the comparative advantage of the product/service. With comparative advantage countries has the opportunity to produce on one product/service at a lower opportunity cost to export for items they do not have the comparative advantage on. Trade barriers must be removed as much as possible so a country can take full benefit from the comparative advantage. Of course many countries are limited along with being discouraged from trading with the United States due to quotas and tariffs on international trading.

I would have to say the big topic for trade barriers, quotas and tariffs would have to be oil. Most recently OPEC has been a big topic in the news with Iran not wanting to export oil to Britain and France due to the EU imposing tough sanctions against Iran which included a freeze of the country's central bank assets and an oil embargo set to begin in July. (ABC) The economy as a whole cannot accomplish its full prospective if trade barriers are in place to stop free trade. If you asked me a semester ago my feelings on free trade I probably would have told you that I was against it 100% that I believed we were Americans and should buy American made products. Now if you ask me the same question I would have to tell you a totally different answer to include that with comparative advantages and opportunity cost I can see where free trade can benefit our country along with other countries.