In discussing about International trade , there are a lot of perspectives that complement the theory. There are three main perspectives that closely related to this scope. They are; Liberalism, Mercantilism, and Structuralism.
Liberalism is the perspective that concern more about freedom of enterprise. It makes the economic system within the country that adopt this ideology, dominated by private companies. There is less government intervention, unlike the Mercantilism perspective. Mercantilism sustain wealth of the country by promote export in order to gain trade surpluses. With this intention, there are some form of protections by the government, to reduce the import. While the last perspective, the Structuralism, focused more into the political-economic interconnectedness or structural relationship between any number of entities; the bourgeoisie and proletariat, the core and periphery and the North and the South.
Based on my opinion, I believe that the point of view of Economic Liberalism is still relevant in explaining the International trade nowadays. I said so, because most of the countries nowadays have free trade agreement like what ASEAN countries have with China. The ASEAN signed a free trade agreement (ACFTA) with China on November, 2002. With this kind of agreement, China and the ASEAN countries will have no barrier to trade, therefore every countries have the same chance to improve their trade activities. The consumption will usually increase due to the cheap imported goods because there are no tariff barrier. Instead of the export, the import sector is more influential because many of people nowadays consume imported goods.
Another one is the foreign investments nowadays that are coming from the Multi-national companies all around the world. As for example, McDonalds and Apple Inc corporation. They have a lot of franchises in so many countries. These worldwide expansion is aimed for profit-making. And profit making is also one of the aspect that economic liberalist mention in their perspective. This makes the private companies wealth keep increasing. For instance, the total assets of Apple Inc keep increasing each year with US$ 176.064 billion in 2012 and US$ 207.0 billion in 2013, as well as its revenue.
These companies are owned privately and it is suitable with the characteristic given by the Liberalist which consider freedom of enterprise. This private ownership make the producers becoming more efficient and innovative because of the profit motives, so they just concern about the consumer utility and how to make products with the lowest possible cost and high demanded. When the products have a good quality with affordable price, it will make the overall consumption increase and GDP will rise as well. It seems like GDP growth is the main concern nowadays and its growth is mainly affected by the consumption and investment. Because if it is quite impossible to be hugely affected by export revenue due to those free trade agreement development.
In addition, Although economic liberalism can be supportive of government regulation in some extent, it tends to oppose government intervention in the free market that inhibits free trade and competition. This match with apparent situation in the case of black market and smuggling. So, economic liberalism expect the least government intervention.
Therefore, I agree that International trade nowadays best explained by the Liberalism theory, because there are a lot of aspects such as freedom of enterprise, profit-motives, free trade, and individualism that are still applicable for now.
Dania Siti Hardiani Hamdan
1701359884
Resources:
http://en.wikipedia.org/wiki/Economic_liberalism
https://www.princeton.edu/~achaney/tmve/wiki100k/docs/Economic_liberalism.html
http://en.wikipedia.org/wiki/Apple_Inc.
https://www.conference-board.org/data/globaloutlook.cfm
Fifth edition: Introduction to International Political Economy by David N. Balaam Bradford Dillman
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