Significance of Free Trade and Protectionism in International Business Management

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Through globalization, many countries have opened their market for Free Trade for reducing prices for goods. Still, there are several factors that affect the condition of workers as well as environmental effects in the country through Free Trade. A rise of such fears has given birth to protectionism.

Certain countries protect the workers in the country by providing subsidies and reduction in tariff for competing with products coming from outside the country. However, protectionism usually raises the price of the products and consumers to find it difficult to have more choice. Also, a country giving tariffs for products can be competed with other countries also giving such reduction in manufacturing stages.

Free trade helps nations to market products being manufactured in the country to be marketed in a foreign country and allows opportunities for competing with local products. Introduction of latest innovations in products helps developing nations to have such products which improve the economical lifestyle factors of the country. Also jobs which becomes extinct in one sector can be diverted into other sector which can be more beneficial for the home country.

Countries can ban certain products if it is causing the environment being affected but Free trade laws does not allows the working conditions in the country in which it is being manufactured. Also the environmental factors that is prevailing in the manufacturing countries are not monitored through Free Trade. Issues related to poor wages and child labor occurs at certain countries where manufacturing is done.

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