Author(s): IGONIBO F. GEORGE | Volume 19 Issue.1 (2023)
Abstract
The paper seeks to achieve two objectives. The first examines whether developing countries can benefit by specializing according to their comparative advantage. The second objective examines if an economy that adopts a free market policy, will effectively achieve greater economic efficiency. A concept of free trade as trade free from discrimination will only appear legitimate if the definition of discrimination is reasonably intelligible. The WTO has used a very ad hoc approach to discrimination. This article develops a concept of bright line discrimination to show that a more coherent approach is at least possible. Adoption of bright line discrimination would require some narrowing of the scope of free trade in order to enhance its legitimacy. The article concludes that specialization in accordance with comparative advantage would indeed be of tremendous benefit to a country. The article also contends that in an economy regulated by free competition devoid of governmental interference, market indicators and forces are not by themselves adequate to provide the needed incentives to producers so that they fully utilise the available resources, and produce and trade in accordance with comparative advantage.
Keywords: Protectionism, Free Trade, Comparative Advantage, Economic Growth, International Trade.