Specialisation and free trade
Specialisation and free trade
- Countries specialise in the goods they make best, then trade: they export what they're good at and import the rest.
- Free trade = trade with no barriers (no taxes or limits on imports).
Practice
Free trade means trade between countries with:
Free trade removes barriers, letting countries buy and sell freely.
Benefits and drawbacks
- Benefits: cheaper goods, wider choice, bigger markets (economies of scale), more competition → higher living standards.
- Drawbacks: domestic firms may not compete with cheaper imports (job losses); a country can become too dependent; new small industries may never grow.
Practice
A benefit of free trade is:
Free trade lowers prices, widens choice, enlarges markets and raises competition.
Practice
A drawback of free trade is that domestic firms may not be able to compete with cheaper imports.
Cheaper foreign goods can force local firms to close, causing job losses.
You've got it
Key idea
- countries specialise and trade: export strengths, import the rest
- free trade → cheaper goods, more choice, bigger markets, more competition
- but it risks job losses, dependence, and harming infant industries