International trade of developing countries is the classic weak vs. strong dichotomy, and underdeveloped or developing countries cannot make it solely on their own efforts; the have nots need help from the haves. Developed nations trumpet the claim that the answer to developing nations’ international trade issues is untrammeled or open market activity as opposed to government intervention by developed nations’ governments. This begs the question as to what extent the governments of developed nations are or should be responsible for supporting developing countries’ growth in international trading markets. Often the protectionist actions of developed nations’ governments to enhance their own international trading activities are the very hindrances faced by the developing countries, so much so that the developed nations are morally obligated to support the developing countries to offset the roadblocks created by these same developed countries with tariffs, quotas and other trade barriers. Trade Problems of Developing Nations In addressing the question, “Fair trade: Is it always ‘unfair’ for the developing countries” (Aditya, 2013), economists have argued that “the implication of fair trade on poverty [dirty exports and use of child labour] depend[s] on the sources of perverse comparative advantage” (p. 20). While developed nations decry the use of child labor in the garment industry in many developing countries and dirty exports of goods with high pollution content such as ferrous and non-ferrous metals, refined petroleum, and paper manufacture, capital flight from developed countries to these developing economies belies the very criticisms made of these industries. As Aditya (2013) points out, “a ban on the use of child labour... ... middle of paper ... ...87). True protection - Concepts and their role in evaluating trade policies in LDCs. Journal of Development Studies, 23(2), 200-219. Manu, F. A. (2009). Import substitution and export promotion: A continuing dilemma for developing countries. Journal Of International Business & Economics, 9(1), 100-104. Oxfam International. (2002). Oxgam annual report. Retrieved from http://www.oxfam.org/en/ annual-reports Singh, J. P. (2006). Coalitions, developing countries, and international trade: Research findings and prospects. International Negotiation, 11(3), 499-514. doi:10.1163/157180606779 155228 Subasat, T. (2009). Does simultaneous implementation of import-substitution and export-promotion neutralize each other? Journal Of Developing Areas, 43(1), 45-63. Winham, G. R. (1986). International trade and the Tokyo round negotiation. Princeton, NJ: Princeton University Press.
Diao, Xinshen, Terry Roe and Agapi Somwaru. “Developing Country Interests in Agricultural Reforms Under the World Trade Organization.” American Journal of Economics v.84, n3 (August 2002): 782-90
Ng, F., Yeats, A. and Er. (1997) Open economies work better! did Africa's protectionist policies cause its marginalization in world trade?. World Development, 25 (6), pp. 889--904.
Globalization has changed the way that everyone conducts business. Throughout history, man has constantly increasing its scope from a local agrarian economy, to cottage industries, to domestic industry, to the newly globalized international framework of commerce that exists today. This progression is quite logical, as it ever increases the efficiency at which products are produced and services are rendered. However, when put in context, the theoretical maximization of efficiency may have dire consequences on independent nations. The over specialization of nations' industries, in the effort of globalization and efficiency, also has the effect of reducing internal commercial infrastructure. This paper examines economic protectionism, and highlights two situations in which its use is fully warranted.
While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.
The developing countries were deeply split. A group of 10 hardliners, under the leadership of India and Brazil, fiercely opposed a new round, especially the inclusion of services, intellectual proper...
In order for a country to run well, it is crucial to provide the goods and services that its citizens need and want. Some countries are able to produce many different goods efficiently while others struggle. This could be because economic resources vary by country, not all nations are experts in the same technologies, and some consumers prefer different quality in the goods that they purchase. For these reasons, it is beneficial for nations to trade. However, there are several protection measures that are necessary for nations to take while engaging in trade, including tariffs, import quotas, and other trade barriers.
7- Fakharuddin, S. M., & Ahmed, M. (2009, August). Export promotion & import substitution. Retrieved from http://fakharb.blogspot.com/2012/04/export-promotion-or-import-substitution.html
The difference in the political economy has often been a major impediment to the growth of international trade among nations. Inflation rates, consumer spending, wars, tariffs all affect international trade. “Trade also brings dislocation to those firms and industries that cannot cut it. Firms that face difficult adjustment because of more efficient foreign producers often lobby against trade. So do their workers. They often
International trading has had its delays and road blocks, which has created a number of problems for countries around the world. Countries, fighting with one another to get the better deal, create tariffs and taxes to maximize their profit. This fighting leads to bad relationships with competing countries, and the little producing countries get the short end of this stick. Regulations and organizations have been established to help everyone get the best deal, such as the World Trade Organization (WTO), but not everyone wants help, especially from an organization that seems to help only the big countries and those they want to trade with. This paper will be discussing international trading with emphasis on national sovereignty, the World Trade Organization, and how the WTO impacts trading countries.
The global economy needs free trade. Countries need free trade. Trade with other countries occurs at some level in every country globally. There may be some indigenous tribes within some countries that can lay the claim that they are self-sufficient, however, there is not a single country that can say the same. Proponents of an open trading system contend that international trade results in higher levels of consumption and investment, lower prices of commodities, and a wider range of product choices for consumers (Carbaugh, 2009, p26). Free trade is necessary. How do countries decide what to import and what to export?
... numerous positive aspects of international trade, some of them include a boost in economic growth, both locally and nationally as well as creates a fairer competitive market space. The outcomes of international trade are explained throughout this essay. Also, this essay identified how monopolies in a domestic market respond to foreign competition and how they must adapt to such situations. The measures taken by government to prevent and control foreign competition are briefly explained and as to how these can work to hinder domestic markets from competition. The positive, short-term effects of trade protectionism are increased government revenue, prevention of ‘dumping’ and an increase in domestic production. Although, the long-term effects of such actions are often the opposite to the original idea of protectionism and could lead a country to economic stagnation.
Mohan, S., 2010. Fair Trade Without the Froth: A Dispassionate Economic Analysis of ‘Fair Trade’ [online]. London: Institute of Economic Affairs.
WTO (2007) World Trade Report 2007 of International Trade Cooperation. Sixty Years of the Multilateral Trading System: Achievements and Challenges
One limitation of International Trade is "dumping." The Investopedia states that, "dumping in international trade occurs when one country exports a significant number of goods to another country at prices lower than in the domestic market (Investopedia. 2010)". For example, if a country decides to sell exported products cheaper than it does to its residents, the process is known as dumping. Romadia has to decide whether to impose tariffs, or set a quota on its import products. Dumping has created a probability that an adverse effect can happen because the result of the adverse effect is a shortage and increases in the prices of the products. Price increases lower the demand for the products. The country’s growth progress hindered because dumping is hurting those countries competing.
“…increasing international trade and financial flows since the Second World War have fostered sustained economic growth over the long term in the world’s high-income states. Some with idle incomes have prospered as well, but low-income economies generally have not made significant gains. The growing world economy has not produced balanced, healthy economic growth in the poorer states. Instead, the cycle of underdevelopment more aptly describes their plight. In the context of weak economies, the negative effects of international trade and foreign investments have been devastating. Issues of trade and currency values preoccupy the economic policies of states with low-income economies even more than those with high incomes because the downturns are far more debilitating.1”