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  • Essay / Advantages of Free Trade Theory - 1257

    However, not all developing countries will succeed in developing their economies after adopting free trade policies. Many developing countries remain poor or worse off because the prices of the technology and manufactured goods they import from developed countries are higher than the income they earn from exporting their products to low prices such as agriculture, which are the main export products of many developing countries. nations. In addition, the opening of domestic markets also carries enormous risks for developing countries that do not have enough capacity to compete with developed countries. For example, after Zambia and Ghana opened their markets, the economic growth rate dropped suddenly because their domestic products could not compete with foreign products and the cost of imports was higher than the earnings from exports. (Byers, 2003). Contrary to his theory that free trade will improve the standard of living of people in developing countries, the effect of free trade, in reality, negatively affects many people in developing countries, especially the poor in countryside, even though the state is experiencing economic growth. In Mexico, while its economy was growing during the first half of the 1990s, many people lived below the poverty line, which increased by 14 million beginning in the mid-1980s (Byers, 2003). In the same spirit, it is also possible to