Trade Liberalization In International Trade

At the same time, the penetration into great markets help to spur an increase in overall competition. Also, Carbaugh (2015) reports with a more open market and larger trading market the risk of monopoly and culluison begins to dissolve. With the demand for more good, countries must begin to trim out wasteful practices, maintain lower prices, increase productive efficiencies, and ensure high quality products. In order to meet the challenges of the dynamic effects, countries will often have to invest in technology upgrades to remain competitive. Additionally, the exchange of skilled laborersand superior knowledge among nations goes far to support the free movement and integration among member nations. An example of such postive effects is the creation of the European Union (EU) which created the opportunity for member nations to begin considering large scale production …show more content…
As Asafu-Adjaye and Mahadevan (2009) states, “regional trade agreements may be viewed as a step towards global trade liberalization” (p. 512). It is true that as trading effects such as trade creation and trade diversion take place, other nations will want to become a union member and thus create larger and larger trade liberalization as a result. Therefore, trade liberalization and free trade agreements can work in concert with one another and continue to support and grow all economic revenues across the globe. While the perfect balance has yet to be created and many studies focus on the perfect storm, there is no true way to fully understand the impact of only having one or the other in a truly global marketplace. As free trading agreements continue to grow, there might be evidence to support the concept that trade liberalization is after all a direct response to the creation of positive and congenial smaller free trade agreements.