A New Perspective on the Role of Comparative Advantage in Promoting Trade Globalization
Comparative advantage has played a crucial role in the development of trade globalization.This paper first reviews the three main stages of trade globalization development from the 1970s to the present.Using the example of China and the United States in the production of clothing and beverages,the paper illustrates the price mechanism through which comparative advantage promotes trade globalization.It demonstrates that specialized production and free trade can increase total output and national welfare without improving their respective labor productivity.Finally,the paper points out the limitations of the comparative advantage theory,including the neglect of trade conflicts,avoidance of dynamic changes,phenomena of diseconomies of scale,and the lack of consideration for environmental and sustainable development factors.It emphasizes that trade globalization is a complex system,and most developing countries need to address the irrational price comparison mechanism when engaging in division of labor and trade based on their comparative advantages.
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