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Being Selfish, in world tradesWhy comparative advantage theories are just fantasies

The comparative advantage theory claims that free trade gives universal benefits, being the best choice to make. Likewise, nations only develop industries which they are specialized in; while fulfilling other items which they do not have an advantage in from importing, is the ideal storyline for world trade. For instance, this theory argues it is most ideal when Ghana sells only Cacaos and chocolates, Brazil only bananas, while the US sells laptops. Furthermore, as countries should only develop those industries which they are specialized in, nations which agriculturally based economies have no need to make an effort for industrializing; they should rather concentrate to agriculture.

Actually, in the true reality of world trade, the optimal benefits which free trade and specializing should have given happen rarely. It rather causes unfair trading, only some nations making a loss. Those unfair world trade structures are usually happening to resource-exporting developing countries or nations with agriculturally based economies. There are many cases which the developed nations’ industrial products sold at high prices while fruits and other agriculture products being cheaper. It naturally causes the increasing of the gap between two nations’ industries, their development (industrializing), and their wealth. The world trade history shows this, as many nations’ industries and agriculture retreated or even collapsed. The nations who will take advantage by FTAs and therefore promoting the comparative advantage theories all had the time when they protected their own industries of immature. However, they took away the opportunities of other developing nations to industrialize are surely unfair and unjust. It is selfish to aim only their own benefits rather than the whole world’s optimal benefits. Some economists-such as Ha Joon Chang- call these actions ‘kicking the ladder off.’

Therefore, I believe that comparative advantage theory is only a selfish action of the developed (industrialized) nations who try to take advantage of the cheap products of others. The theory will bring unfairness on world trade and the benefits for minority nations instead of the ‘optimal’ and ‘universal’ development of world trade. Also, a ‘fairer’ trade is needed for the world; the agriculture products should receive their correct prices, FTAs should not be means of few countries’ selfishness. The best way world trade should lead to is the development of the global society, not few powers. It seems apparent that every nation should have the same opportunities to develop them, and contribute to fairer trade cultures.

허윤서  na0ah@naver.com

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