Aliya Tlebaldy | 31.03.2024
Unlocking Economic Potential: The Power of Free Trade Agreements in Kazakhstan
In recent years, Kazakhstan has emerged as a significant player in the global economy, strategically positioning itself as a centre for trade and investment in Central Asia. One of the key drivers behind Kazakhstan's economic growth is its commitment to free trade agreements (FTAs) with various countries and economic blocs worldwide. This article will cover the impact of free trade on Kazakhstan's economy, exploring the opportunities it presents and the challenges it faces.
In short, free trade is an agreement between countries in which the goods coming into or going out of a country are not controlled or taxed. Kazakhstan is in this type of agreement between CIS countries (Russia, Belarus, Moldova, Azerbaijan, Uzbekistan, Armenia, Tajikistan, Kyrgyzstan, Turkmenistan) in order to achieve these goals:
Advantages and Disadvantages of Free Trade:
As more and more countries encourage free trade due to its several advantages, there may also be some drawbacks.
Advantages:
Disadvantages:
Free trade stands as a cornerstone of economic development, aiming at economic growth, lower unemployment, and global integration among nations. As we navigate the complexities of the 21st century, our understanding of free trade can be the starting block of building a more resilient, inclusive, and sustainable global economy for future generations.
In short, free trade is an agreement between countries in which the goods coming into or going out of a country are not controlled or taxed. Kazakhstan is in this type of agreement between CIS countries (Russia, Belarus, Moldova, Azerbaijan, Uzbekistan, Armenia, Tajikistan, Kyrgyzstan, Turkmenistan) in order to achieve these goals:
- Economic growth: By exposing domestic industries to international competition. Free trade pushes firms to become more efficient, innovate, and improve the quality of their products, ultimately contributing to economic growth.
- Job creations: The expansion of market access enables domestic producers to increase exports, leading to the requirement of new jobs in the industries.
- Global Integration: The flow of goods, services, capital, and technology across borders leads to greater economic interdependence and cooperation between countries, reducing conflicts and promoting peace.
Advantages and Disadvantages of Free Trade:
As more and more countries encourage free trade due to its several advantages, there may also be some drawbacks.
Advantages:
- Lower prices for consumers: Consumers can buy goods at lower prices, consequently improving their standard of living through increased purchasing power.
- Lower input costs: Through international trade, countries can obtain essential inputs for their industries at a much lower cost.
- Wider markets for businesses: As companies are able to sell much larger quantities in a wider range of markets, they will be able to exploit economies of scale. This will help lower costs and improve efficiency.
Disadvantages:
- Foreign competition for domestic businesses: If these imports are good in quality and competitively priced, domestic producers might struggle to compete. As a result, countries can experience dumping.
- Unemployment: Backups of domestic firms not being able to compete in the market resulting in job losses and increased unemployment.
Free trade stands as a cornerstone of economic development, aiming at economic growth, lower unemployment, and global integration among nations. As we navigate the complexities of the 21st century, our understanding of free trade can be the starting block of building a more resilient, inclusive, and sustainable global economy for future generations.
