Quastions ch 5 Essay Example | Topics and Well Written Essays - 750 words

Quastions ch 5 - Essay Example It thus allows for removal of tariffs and trade barriers in the bilateral trading platform. Interventionism theory has transformed international trade since its inception. It is a theory that explores the justification of economic or political interference of another partner. Historically, the difference in capital base, technology and labor supply was used as a tool of economic coercion by powerful economies to coerce developing economies into imbalance multilateral trade policies and practice. Today, modern international ethics in business have significantly diminished this form of economic exploitation. The criteria of modern intervention are purely mutually beneficial trade ties that emphasize on mutual respect, ethical business agreements and removal of economic paternalism. The principle of interventionist theory has been significantly eroded in the wake of modern economies and expansion of liberal marketing and free trade (Ruta & Venables 2012). Free trade policy has encouraged global efficiency by allowing every countrys freedom to access international markets at equal level. Unlike in the past where there were bureaucratic bottlenecks, many multilateral trades have successful in creating a platform where a range of products from different countries can interact. In addition, it has created mutual global interest in pursuing economic depressions and crises through stabilization of prices on energy and petroleum products. Besides, through free trade, there has been tariffs reduction, less restriction on goods movements and entrepreneurs have shifted from focusing on local trade to international. In addition, it has expanded export trade leading to lower prices of commodities. Global efficiency of goods movement, bilateral and multilateral trade agreements easily executable are due to removing of international trade