Why Trade is Important Between States

In class we learned that not everyone likes trade because it produces losers, but what would happen is we did not have trade? I feel that as an American I would not have access to a lot of products because of trade. I think trade is important because it creates relationships through an exchange of goods. I think that if there are losers in trade then other states need to help the losers win. That means if Canada has more of an opportunity cost, like the keg and pizza example explained in class, Then the U.S. should assist Canada and lessen that opportunity cost. In turn, Canada does not end up losing but it ends up creating a relationship with the U.S. so they can mutually help each other through trade.
I also think about states that do not have access to certain goods or people take advantage of the goods that is a part of that land. There can be a good that the people of that land receive that can help produce jobs. Maybe it computers in a country who does not have access to internet, but with the internet and computers put into those states it can create more businesses and revenue to come out of that state. And that is how this sectoral trade theory can be refuted. The workers end up winning because of trade.
Another reason why trade is beneficial is that it will teach states that "lose" in trade to learn how become winners at trade. That is why I think the protectionist policies are essential to teach states how to reach certain quotas. And if those states do not reach those quotas they can adjust how much of the good they are selling and how much they are selling it for. Losing states can create standards for their trade instead of counting themselves out as losers they can create goals for themselves in trade. To me I do not think that winning in trade is about producing the most amount of product and selling to many states. Those products that winning trade states are selling may not be quality product. I think that smaller states with smaller economies can win at trade as well. If a state can consistently produce a quality product, then they can win at trade.

I feel that smaller states can benefit from trade because it creates relationships with winning trade states that can help grow the state. Trade also creates jobs for smaller states and trade can teach smaller states how to become a winning trade state by the help of other states who are succeeding in trade.

Comments

  1. UnknownNovember 12, 2017 at 12:54 PM

    Trade is crucial around the globe and allows for a large source of income to many. With trade it allows for competition and also a high demand of jobs. Do you feel that there is anyway to make trade for beneficial to other countries and not just focus on larger states?

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    1. Victoria PierreNovember 12, 2017 at 6:25 PM

      Sydney I do agree that trade is crucial and I think that a way we can make trade beneficial is maybe the small countries that have one resource should be the only one selling it? Or other countries who want to sell the same thing have to pay a little tax that goes toward that smaller country.

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  2. Jared RostkowskiNovember 12, 2017 at 1:21 PM

    Although there are considered winners and losers in trade, the losers don't actually lose. The points you make about the "losers" learning from the experience to help them become winners is good. Sometimes you have to lose in order to win. Losing in one trade might help you win in another, or even win more in the future. Do you see trade as a sort of "adapt or die" type of deal? If a smaller country doesn't try to improve themselves through trade do you think they can improve at all?

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    1. Victoria PierreNovember 12, 2017 at 6:27 PM

      I see trade as a "adapt or regress" type of deal. I think that countries who don't trade will regress and they will fall behind economically. I want to give small countries a chance and I do think they can improve with the help of other countries.

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  3. Tom PilatNovember 12, 2017 at 5:25 PM

    Yes, while trade does produce "winners" and "losers", having trade is better than having no trade at all. I like how you brought up the fact that, countries with a more limited background in trade may have setbacks, but being a "loser" will help the country critique itself and acquire more skill in trade. Trade is also essential for keeping important relations with other states and providing countries with essential opportunities to grow and prosper.

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  4. UnknownNovember 12, 2017 at 8:36 PM

    I think that while your point about countries that lose in trade using the experience to become better trading partners is an interesting one, I think that there is also a risk of a "winning" country taking advantage of a "losing" one over the long term and stifling its ability to grow economically. How prevalent of an issue do you see this as being and do you think that it merits more regulations on the way countries conduct trade?

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