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Merits and demerits of WTO? (5points plz) |
| Answer» Demerits:1 - the rate of benefits to\xa0be the member of WTO 2 the developing countries is low.2 - Many laws of WTO are unfavourable to the developing countries3 - Certain clauses of WTO agreement on agriculture put restrictions on the provision of subsidised food grains in India\xa0Merits:Lower prices for consumers. Removing tariffs enables us to buy cheaper importsFree trade encourages greater competitiveness. Firms face a higher incentive to cut costs. For example, a domestic monopoly may now face competition from foreign firms.Law of comparative advantage states that free trade will enable an increase in economic welfare. This is because countries can specialize in producing goods where they have a lower opportunity cost .Economies of scale. By encouraging free trade, firms can specialize and produce a higher quantity. This enables more economies of scale, this is important for industries with high fixed costs, such as car and aeroplane manufacture Free trade can help increase global economic growth. | |