In Law, what is Liberalization?

Mae Morgan

Included in the definition of liberalization is the act of freeing up rules and regulations in order to promote increased movement. In economics, liberalization applies to any act of freeing up regulations in order to promote world trade. Global trade is generally debated by two distinct camps: protectionists that want to keep all trade within a country's borders, and people who prefer liberalization. Some hold that a brisk world trade would benefit the citizens of all countries by providing jobs, income, and an improved quality of life. Others debate that free trade causes some countries to endure poor working conditions and low wages without experiencing any advantages.

Man with hands on his hips
Man with hands on his hips

An example of this debate is regulation of foreign automobile imports. If the number of foreign imports into a country were kept to a minimum, it would stand to reason that more of the automobiles produced in that nation would be sold. Fewer jobs might be lost if automobile production remained stable. Generally, an increase in the number of workers could lead to a healthier economy. The practice of liberalization by restricting free trade in an economy is called Protectionism. To protect the economy in a nation and keep jobs in the country, free trade is regulated to the point where no exports are going out and no imports are coming in.

Protectionists maintain that a global market leads to unfair trading practices, job losses, and an imbalance of trade. Unfair trading practices include producing goods at a lower cost in one country and passing the savings on to the receiving country. As a result, foreign workers get the jobs that were previously were by domestic workers. An imbalance of trade deficit means that a country purchases more than it produces.

Free-trade agreements are a form of liberalization that seeks to ensure that all countries benefit from specific goods and services of other countries. In this way, the countries can rely on each other for the provision of goods and services that are not available in their respective countries. Not only do free-trade agreements support a global market, but cultural barriers could be diminished as the world becomes a large community instead of separate, closed-off nations. Generally, economics are more stable when all economies are healthy, all citizens are contributing to the workforce, and the world nations are self-supporting.

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