Saturday 9 July 2016

Equal deals, but different outcomes

Usually the two sides of a trade agreement receive the same trade deal, in the hope of making the two sides mutual benefit from the agreement. However, though the agreement may be mutually beneficial, the two sides benefit from the agreement to different extents. If there are only two countries trading with each other, the agreement could be equally beneficial to the two countries; however, when the two countries which sign the trade agreement also involve in trading with other countries, which is much more realistic, then the two countries will benefit from the agreement to different degrees. However, is there a possibility that due to the complexity of the international trading network, a trade agreement could actually hurt one country's benefit?

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