trade liberalisation

Question 1

define trade liberalisation

Answer 1

Trade liberalisation is the removal or reduction of barriers to trade between different countries

Question 2

benefits of trade liberalisation

Answer 2

• Increased international trade allows businesses to increase their market size
  This leads to increased output and countries can benefit from economies of scale
• Freer trade helps businesses to reduce costs as imported raw materials and components can be sourced more cheaply

Question 3

drawbacks of trade liberalisation

Answer 3

• Domestic firms, in particular, Infant industries may not be able to compete against international firms
• Some industries may be subject to dumping as businesses abroad may sell excess products at unfairly low prices