Free Trade Essay Example | Topics and Well Written Essays - 1500 words - 1

Free Trade - Essay Example In the global context, promoting free trade means opening up global markets. In other words, markets increasingly become liberal as protectionist activities reduce. The idea is to offer global trade players an equal environment within which they conduct their business. Notably, governments are the primary enforcers of free trade in the international trade environment. In streamlining free trade across the globe, governments come up with policies or programs that formulate and implement oversight authorities such as World Trade Organization and the European Union. These bodies enforce trade agreements and relationships, thus ensuring compliance to the set rules and regulations. For the European Union, the mandate of the body goes beyond the trade factor. However, the economic aspect of the union is critical to the realization of free trade within and across member states. The realization of global free trade is not an easy process. This is because diverse and dynamic factors affect trade activities within and across domestic, regional, national, and international levels. In today’s global economy, there are many different operational trade agreements and treaties. This shows the extent to which international trade players are willing to embrace and subsequently practice free trade. David Ricardo’s comparative advantage theory is influential in international trade (Daniels, Radebaugh, & Sullivan, 2012). This theory sets out the advantages of international trade based on the production factor. In light of the theory, trade is important because it allows producers across the globe to capitalize their production strengths while benefiting from the strengths of another state in the same regard. This theory informs the basis of free trade, where stakeholders seek to maximize their trade welfare through liberal or more open markets