that several stages of producing a good take place in different countries around the world.

19.4 The Benefits of Reducing Barriers to International Trade

Tariffs are placed on imported goods as a way of protecting sensitive industries, for humanitarian reasons, and

for protection against dumping. Traditionally, tariffs were used as a political tool to protect certain vested
economic, social, and cultural interests. The WTO has been, and continues to be, a way for nations to meet and

negotiate in order to reduce barriers to trade. The gains of international trade are very large, especially for

smaller countries, but are beneficial to all.

Self-Check Questions

1. True or False: The source of comparative advantage must be natural elements like climate and mineral

deposits. Explain.

2. Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of
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