Understanding Free Trade

Later, we often see the term free trade. What exactly is the definition of free trade? Free trade is the exchange of goods and services between countries without any rules. Rules in this case is the tax, export and import quotas, state regulations regarding protection and other regulations if inhibited interstate commerce.

Definition
In short, the notion of free trade is interstate commerce without the hassle of bureaucracy. If you want to sell goods overseas, we can sell it easily. Likewise, on the contrary. On free trade, no longer called import duties and customs exit. Everything is free. Nor was there called protection or protection of domestic goods against "attacks" foreign goods. All free trade.

Background Free Trade
According to Western thinkers, the existence of rules in an interstate commerce to make each country becomes developed. Everywhere, a bureaucracy that is too complicated instead of easier instead be troublesome. For that reason, free trade occurs. In addition, free trade makes each country more able to focus with the products or services under their control.

Each country certainly has its advantages and disadvantages of each. There are countries that can not make sophisticated equipment such as computers, but has natural resources that allow for the sale. On the other hand, there are countries that have the capacity to make sophisticated equipment such as computers, but the country's poor natural resources.

Before free trade, these countries may have barriers to interact with each other. Barriers are none other than the regulatory issues. However, in the presence of free trade, these countries could ultimately interact.

How Fruit Simalakama
Simalakama like eating fruit, eat wrong, do not eat too wrong. Free trade is beneficial from one side, but from the other side of free trade hurt the weak groups. Who are they? One is the entrepreneurs in the country. Given free trade, which means no limits or rules in trade. No more protection.

In fact, during this, developing countries could be safe from the "attack" foreign products are better quality and cheaper because of the protectionist policies of the government (policy to protect domestic goods from foreign goods). For developed countries, free trade is considered very favorable. They can easily search for a staple to other countries.

In addition, they could expand the market with ease. In terms of quality, of course, developed countries do have an advantage over developing countries. If developing countries can not improve the quality, the market itself will prefer other countries are more advanced.

For example, people now prefer foreign products over domestic products alone. The reason the issue of quality and cheaper prices. These conditions would be so detrimental to entrepreneurs in the country. If they can not innovate, just be ready folded. That's why free trade is still being debated the economists. Will free trade brings benefits or calamity? We'll see.