Theoretically, this research will widen the scope and depth of research on the fundamentals of the free trade. This research also has implications on people’ s attitudes towards free trade. In most parts of the world, people still view free trade as a corruptive and destructive tool promoted by western nations, rather than a constructive one. People also think that free trade can be used by other countries to gain unfavorable political, economic or diplomatic advantages. This is, of course, a misconception and one of the target areas of this research. The research will improve the existing literature by expanding its depth and scope. The writer argues that international development is best helped through free trade.
The writer will review past and current literature critically to develop a coherent and holistic perspective on the topic. The writer will also provide the expectations of the research, develop the research design. Finally, the writer will conclude the paper by rehashing the main arguments and restating the thesis and findings. Proponents of free trade theory argue that free trade brings significant benefits to all nations that sign free trade agreements.
In summary, the losses pale in comparison to the benefits. Based on the concept of absolute advantage, countries should focus on producing those products and services in which they enjoy absolute advantage and also exchange other goods3. In addition, all countries should focus on manufacturing those products they can manufacture more efficiently. While at it, they should import the good that they are manufacturing less efficiently. Doing this allows them to increase their gross production, i. the manufacturing potential frontier moves outwards. Consequently, the concept proposes that free trade is a positive-total gain in which all participating countries benefit.
The Hecksler-Ohlin theory holds that the comparative advantage derives from disparities in factor endowments – factors of production such as land, labor, and capital – instead of productivity
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