INTERNATIONAL TRADE LAW SCHOOL - PUCPR

STUDENT: CAROLINA C. MONTEIRO DA ROCHA

CLASS: I
DATE: 08/25/2017

Question one: Why are gains from trade when countries are different?
There is no news on the fact that countries do not have the same distribution on natural
resources, gains per capita, working arrangements and technological developments. Following this
perspective trade becomes essential to fill all the necessities from the difference between multiply
countries. Those differences are completely necessary and important to establish the International
Trade.
Question two: Reasons in favor of free trade.
Following the line presented on question one, it is possible to reaffirm the difficulty of a country
being isolated or self-sufficient, considering every country as a co participant on worldwide
economy, hardly a single economy could be complete in whole extension.
The basic reason are the natural resources. An example can be the Mineral coal, all known
reservations are concentrated on six countries: Russia, China, EUA, United Kingdom, Germany and
Poland. Those ones commercialize with Latin America, Asia and Africa, which have small native
supply. Yet European countries are very dependent on Middle East oil. All of those multiple demands
balance the market and can provide the necessary resources.
As a second reason the weather and soil, they are determinant on the food production. The
majority of cocoa production is focused on South America and Africa, they are able to supply North
America and Europe. On the other way around cotton production are dominated by North America,
Asia and Egypt, countries where the weather is favorable to this activity.
The capital, employment and population can be consider good reasons in favor of trade
because they can create significant international chains. These three factors are not combined in
equal proportions in different nations. Countries where the employment factor, caused by the large
population, are more developed than the other resources the production of products that require
less land are major, assembly lines can be used as an example. Countries with low population are
likely to exercise activities that demand more land, the wool can be mentioned in that case. This
asymmetry motivates the international specialization, proportioning the raise of trade.
Technological position can also be determinant nowadays. Since the Industrial Revolution
divergences on technological development between countries could be observed. This motivates
trade because of the different stages of industrial culture, capital disposition and scientific
researches. The exportation and importation of technology is crucial to the market survival and
become an essential factor on daily basis to humanity. Less developed countries are able to have
access on indispensable technology, and the producers countries can use trade to import resources
and maintain the trade political.

SOURCES
ROSSETTI, Jos Paschoal. Introduo economia. 16. Ed So Paulo: Atlas 1994
KILLOUGH, H. B. International Trade. New York, McGraw- Hill, 1938