Some countries are ‘better’ at producing certain types of product than others. They can produce the goods or services more cheaply, quickly or efficiently. They have workers with particular skills or they have the land, climate and resources that other countries lack. As a simple example, the UK does not have a climate suitable for growing bananas, and therefore needs to import these from a country which has the right conditions for growing them.
It seems to make sense, then, for countries to specialise in producing the goods and services that they are best at and to trade these for things they are less good at producing or cannot produce at all. This is known as the principle of free trade.
Free trade trampling on the poor
With each country specialising in what they are best at producing and selling, free trade should benefit all countries. But in fact, free trade has resulted in very unequal trade. The 48 poorest countries, home to ten per cent of the world’s population, have see...
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