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Free trade makes rich countries richer and poor countries poorer Nowadays, free trade is an important trend of the global trade Free trade means that there should be no controls on trade or capital in.
Free trade makes rich countries richer and poor countries poorer Nowadays, free trade is an important trend of the global trade Free trade means that there should be no controls on trade or capital investment Barriers on trade such as tariff, quotas are removed Free trade brings many advantages and disadvantages to the countries In my opinion, free trade may increse the gap between rich and poor countries Firstly, the rich countries gain more from free trade When they execute the free trade agreement (FTA) with other countries, they can purchase the goods and materials that have lower cost and higher quality than before According to the absolute advantage theory, a nation has the ability to produce a good more efficiently than the rest of the world The developed countries that not only have the high technology, experiences on manufacture and management, but also import the good primary commodities with the low price from the LDCs They can produce the goods more easily, so they can sell the finished products with the lower price The developed countries gain the benefit most from free trade They are richer and richer For the poor countries, they are facing some challenges in free trade Their low technology and unimproved infrastructure unable them to produce goods in the same volume and quality as the developed economies who have great competencies Their export structure mainly depend on primary commodities which have low price On the other hand, they must import some finished products and semi-finished products from the developed countries According to the term of trade theory, the TOT of the LDCs is usually less than 1, so they loss from trade In conlusion, the free trade shall bring many not only advantages but also disadvantages to countries The gap in income between the developed countries and less developed countries are continued to widen