Free Trade – the Prevalent Path to Progress

Mounting uncertainties and growing imbalances in the world economy tend to further ignite the debates over the policies on liberalization of international trade. Such heated debates are dividing governments of industrialized states and developing countries. They are also splitting various NGOs and groups of interests into clashing fighters for and against free trade.

Most analysts, however, be they supporters of older or more recent theories, agree that trade is indispensable and, consequently, its liberalization is beneficial for practically all countries, irrespective of their level of development. This is mostly valid for the industrialized ones:  with their capital-intensive goods they are already competitive on external markets. This is also true for those states capable to quickly adapt to external demand. In the latter case, the “Asian tigers” – e.g. South Korea, Singapore, Hong Kong –, with their galloping export-driven economies, used to be given as the most telling examples of benefits derived from trade liberalization. More recently, China and India (as already mentioned), as well as several Latin American countries (e.g. Chile and Brazil) are considered as success stories of thorough trade liberalization.