JC Economics Tuition Notes
International Trade

H2 Economics Only

Our economics tuition will examine the meaning of International Trade, which will feature the essential Theory of Comparative Advantage. This Theory of Comparative Advantage is used to explain why countries should engage in free trade, seen in terms of the formation of bilateral and regional Free Trade Agreements (FTAs, in short). Through the derivation of the Terms of Trade, countries can then decide what and how much to trade. By engaging in free trade, countries can benefit from the advantages of free trade, such as the access to cheaper resources for production and consumption. However, free trade may also give rise to detrimental impacts on economies, thus necessitating the imposition of trade protectionism, which refers to the setting of artificial trade barriers.