Question

1)Do you think limiting foreign trade is good or bad for American consumers and manufacturers? Justify your argument.

2) More than 400 firms around the world are involved in making the components of the Dreamliner 787. Can you find another example of a product that illustrates the globalization trend nowadays?

3) Who are the winners and losers from free trade?

Answer 1

Answer-1) In my opinion limiting foreign trade is not good for American consumers. Free trade implies when there is free movement of goods services, capital, personnel, technology cross borders. While protectionism involves the safeguarding an economy's domestic interest from evil effects of free trade through measures like tariff, licensing, quota on imports, restriction on FDI etc.

However if we discuss about employees, domestic sellers and investors, their interest will get badly hurt with such practices and trade. They lose a great ratio of their bargaining power. Also with competition from international sellers, domestic sellers have to suffer a lot if the importing country is more advances that can facilitate the customer for better quality products at fewer prices. Off shoring would also result in less opportunities of employment for domestic labor. In this way, their interest is suffered.

As per policy we have to answer first question