Comparative Advantage To Globalize Crude Oil In The US

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Globalization has led to countries being dependent on one another. This is because globalization allows for the movement of people, ideas, capital, and products. International trade is an aspect of globalization. International trade gives countries the space to sell their products to different people around the world, it also allows for states to specialize in what they do best. This is the essence of comparative advantage. Comparative advantage is when the country has “the ability…to produce a particular good or service more efficiently than other goods or services…” (Frieden 294). The United States is known to be the biggest exporter of crude oil in the world. Since the U.S. has the technology to retrieve crude oil more efficiently than other states, the U.S. has the comparative advantage in exporting crude oil (Lawarence). Comparative advantage not only gives space for countries to …show more content…
There are a number of ways for governments to restrict trade. Governments can restrict trade through tariffs, quantitative restrictions, import licenses, and other forms of regulation (Frieden 299). Trade is usually restricted for domestic reasons. For many producers, trade may decrease the demand for their domestic products, which could put their profits as well as their job in jeopardy (Frieden 299). When imports are taxed, it causes the domestic producers to also raise the price of their product in order to expand their profit margins. Therefore, in order for governments to protect their own citizens and economy, they put restrictions on trade. Another possible reason for why some states many restrict trade could be to maintain their sovereignty. States may consider it a large risk to continue to allow the products of other states to enter their countries without any restrictions; therefore, restrictions are placed as a means of protecting the

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