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Trading: Global Level Module #4 of the Global Economics necessitates an evaluation of global governments efforts in assuring developing countries obtain a fair and adequate share of the global trade (Poolen, 2013). To this, a response to the interventions of global governments and their need or desire to intercede in third world economics must be indicated. All of which must be derived from chapter #6 & #7 of Carbaugh’s discussion within the text to both support and extrapolate a conclusion (Poolen, 2013) (Carbaugh, 2011) . Developing nations’ problems, trade policy, export growth, or industrial policies should be addressed as topical discussion for this assignment. Analysis of internal as well as external governmental factors must be included in the extrapolation to include political and economic necessities of a need or behavior. To meet this, the examination of Taxation, Export, Import, and Geographic location must also be included as collective weights for decisions at a global level in trading practices. An analysis of Free Trade Agreements, Competition in Developing Countries, Impact of Global Economics, and Policies are other specifics reviewed to explore the global trade in third world countries. Discussion Free trade agreements (FTA) and their likelihood of being bargained between counties have specific historical steps. The first and most prevalent, FTAs are more apt to be made the closer in geographical distance two countries are. This also applies the economic size and the access to the export market as specific determinants for trade. Agreeable trade becomes more advantageous as the ratios of labor differ within the two countries. Interestingly enough, empirical studies find that political economy models... ... middle of paper ... ... 3). Works Cited Baldwin, R. & Jaimovich D.2010 Are Free Trade Agreemnts Contagious Cambridge, MaNational Bureau of Economic Research ECN500-Week 4 Assignments Edwards, C. & Rugy, E.2002 Policy Analysis: International Tax Competition A 21st-Century Restraint on Governement Washington D.C.Cato Institute Hoekman, B. & Holmes, P.1999 Competition Policy, Developing Countries and the WTO Washington DC University of Sussex and College of Europe, Bruges International Economics 13th Edition2011Mason, OH: South-WesternCengage Learning Kumar, N., Das, A., Debnath, B., & Mandal, S.2012Global Economic Crisis: Causes, Impact on Indian Econom, Agriculture and Fisheries International Journal of Agriculture Sciences221-226 Moise, E., Delpeuch, C., Sorescu, S., Bottini, N., & Foch, A.2013 Estimating the Constraints to Agricultural Trade of Developing Countries OECD Publishing
In the Introduction, Patel outlines some of the major issues he addresses in the ten chapters of his book. The most important of them being: the abundance of food in the world vs. the starvation that is evident in countries such as India and Mexico, reduced prices on crops and how farmers compensate by working harder and producing more, and how the number of people involved in the food economy is gargantuan compared to the number of people who actually make decisions and control what happens in our global food system.
Regional trade agreements have been prevalent since the early 1990s. A Regional trade agreement removes all barriers to trade and foreign investment, which means that poor economies are not allowed to use import tariffs to protect their growing industries or their farmers from floods of cheap imports. Free trade agreements also include additional rules on investment that pose a prospective threat to poor people’s access to public services. This clearly states that even though poor countries have the advantage of strength in numbers as compared to the rich economies and countries, the former are more likely to be pushed into accepting unreasonable demands of the richer economies. Therefore, it can be analyzed that a Regional Trade Agreement between equal partners can prove to be beneficial for both, but such an agreement between unequal partners ( rich and a poor economy) shall probably prove to be beneficial for the stronger economy.
Even in a world focused on the benefits free trade and aimed at achieving the goal of free trade, states are protectionist by nature. Unfortunately, the design of the international system allows for stronger nations to be more protectionist, leaving the weaker states even more vulnerable. A study that is more intensive than a critical commentary should be devoted to analyzing the impact of free trade on developing nations. I was limited to the readings and prior knowledge, and thus couldn’t provide a sufficient analysis on the fair treatment of developing nations. I was skeptical of the one reading that focused on fairness of international institutions because of the statistics that indicate these nations have not done well in recent decades. I would like to look into this more given more time and resources.
Gonzalez, Carmen G. "Institutionalizing Inequility: The WTO Agreement on Agriculture, Food Security and Developing Countries." Columbia Journal of Enviromental Law (2002): 431-487.
What is free trade? Many American’s have a broad and sometimes-false idea of what free trade actually is. Free trade “refers to the economic philosophy and practice of reducing barriers such as tariffs, taxes, subsidies and quotas so that raw materials, goods and services can move unhampered across national borders.” (68) Various options have arisen about whether or not free trade benefits developing counties or not. I believe that free trade is not favorable or helpful towards developing counties. Free trade benefits few but not the masses, is in favor of rich companies with large corporations, means a loss of power and political control on a national, regional and local levels of government, as well as allows for child labor and there for loses out economically. Many people here in the United States are not well informed about Free Trade or its drawbacks. By giving people the information and steering them toward a better form of trade such as Fair Trade we could possible help those other counties that are dealing with the effects of free trade.
Lipsey, Richard G.. "Will there be a Canadian-American Free Trade Association? ." The World Economy 9 (2008): 218-238.
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 first approach of “Free Trade” came on September the 26th 1985 when Bill Mulroney, the Canadian Prime Minister and leader of the Canadian Progressive (socialist) Conservative Party met with American President Ronald Reagan to discuss the possibility of creating a free trade compact with the U.S.A. On October the 4th 1987 the essential negotiations came to a conclusion creating the first draft of a North American Free Trade Agreement. On January the 2nd 1989 America and Canada sign the first draft of a “Free Trade Agreement” creating the possibility of merging all of North America’s economies to compete in the global market. With the probability of Mexico entering the agreement and the idea of cheap labor for both Canadian and A...
While free trade is supposed to mean that governments do not interfere with trade by applying policies to affect trade, all governments do intervene in trade to give their country an increased financial advantage. The effects of the government policies are further discussed as well as how those policies affect free trade.
Firstly, what should be noted here is that international trade has been providing different benefits for firms as they may expand in different new markets and raise productivity by adopting different approaches. Given that nowadays marketplace is more dynamic and characterized by an interdependent economy, the volume of international trade has grown substantially in recent years, reducing the barriers to international trade. However, after experiencing the economic crisis that took its toll in 2008 many countries adopted a different approach in terms of trade barriers by introducing higher tariffs in order to protect domestic firms from foreign competition (Hill). Secondly, in order to better understand the implications of the political arguments for trade it is essential to highlight the main instruments of trade policy (See appendix 1).
...liberalisations have had adverse consequences for some – including the poorest people – but should we automatically condemn trade initiatives because it means that one person loses or is pushed into poverty? The identification of hardship arising from a generally desirable policy reform should stimulate the search for complementary policies to minimise the adverse consequences and reduce the hurt that they unintentionally cause (Winters, 2002). ‘No country has successfully developed its economy by turning its back on international trade and long-term foreign investment’; although trade alone may not offer a solution for poverty reduction, the OECD and DFID have recently published reports identifying that combining aid and trade initiatives and encouraging the integration of trade and aid could progressively and sustainably alleviate poverty (OEDC, 2009; DFID, 2005).
They also wanted rich industrial countries of the North to share their means and power with the countries of the South. The Report contains a number of proposals for the reform and transformation of the world economic system. The Brandt Reports also called for prompt and urgent action for the poorest nat... ... middle of paper ... ... ead of promoting accessible, balanced exports of goods and resources between rich and poor nations to build cooperation and enlarge international markets, trade has been hampered by local subsidies and protectionist barriers, driving down the export prices of developing nations * Rather than making global economic rules and institutions equitable for every nation, restoring confidence and trust throughout the world, money and finance remain unregulated at the global level, resulting in currency instability, recession, and financial risk in developing nations The report contains little real substance, a collection of 'well intentioned' formulas but a bit over ambitious.
Globalisation has been one of the most significant developments of the last half century, and issues such as trade and international commerce have become increasingly important. In consequence, problems such as poverty, unfair wages and poor working conditions in third world countries have been drawn to the attention of consumers (Hayes and Moore, 2007). This is a growing global issue which cannot be ignored by anyone concerned about the problems in developing countries. Free trade and Fair Trade have both been offered as solutions to these issues.
Fletcher, I. (2011). Crumbling of Free Trade – And Why it’s a Good Thing. Retrieved from
Krishnaraj, Maithreyi. 2006. “Food Security, Agrarian Crisis and Rural Livelihoods.” Economic and Political Weekly 41 (52): 5376-5388.