The Importance of Free Trade in a Globalized World Economy Free Essay Example, 1250 words

The best way to improve the global economy is to enhance the chances of a more international trade. This is the main objective of forming the World Trade Organization and entering into trade agreements like GATT so that the member countries will be encouraged to enter into trade and commercial transactions more freely. Such a situation where there are increased commercial activities between nations improves the free flow of foreign exchange from one country to another. If the world economy is to be strengthened there should be an all-around economic growth in all the countries. This is possible only by encouraging free trade between the countries. The economic history of the world has witnessed the free flow of foreign exchange from the industrially advanced countries to the emerging economies in the form of Foreign Direct Investments for promoting various infrastructural facilities in the developing countries. China can be cited as one best example for the development of the world economy through free trade. With the rapid changes the country brought about in the country in the form of market economy reforms, the country was able to attract more foreign investments. We will write a custom essay sample on The Importance of Free Trade in a Globalized World Economy or any topic specifically for you Only $17.96 $11.86/pageorder now This has greatly facilitated the country to make an all-around improvement in its economic activities. With the growth in the economy, other nations identified a potentially large market for their goods and services in China and this has made the United States and other Western countries to expand the scope of their presence in China. This had automatically led to the flow of foreign exchange between countries both in the form of trade-related transactions and on capital accounts for investment purposes. The development of China and other third world countries can easily vouch for the importance of free trade to the global economy. Yet another important element of the global economy is the availability of adequate employment opportunities in all the countries across the world.