The modern economic trends are revealing that International Trade is helping the growth of Developing Nations. The openness to international trade has been lucrative to the developing countries for rapid economic growth. The adoption of open market policies, and decline in the concepts of trade protection in certain developing countries has helped them immensely in their rapid economic growth.
India and China, at present are the best possible examples of developing countries in international trade. Many countries enjoyed rapid growth by turning down trade barriers and accepting the new technological developments. Countries like Japan, France, Greece, Netherlands, Denmark, Norway, Italy, and Portugal have displayed such trends, in the post World War II period.
International trade supports growth in a variety of ways. It makes the producers more efficient as they must contend with some of the best in the world. The open markets also provide access to some of the best technologies, which allow countries to focus on certain industries, rather than producing all on their own. One of the main reasons behind the fall of Soviet Union was the failure to adopt advanced technology, in order to compete with the other world class producers.
The advantages of international trade for developing countries
Growth and Development: International trade is one of the most crucial elements in the economic growth of a developing country. As per the study of Joseph Francois of Erasmus University in Rotterdam, new trade relations would generate US$ 90 billion – US $190 billion per year.
Confidence and Energy: The present economic slowdown in trade would be harmful for the developing economies. New trade relations would help induce extra energy and confidence into the financial markets, and support economic growth and opportunity, in the short run.
Opening of Agriculture Market: International trade and new trade relations would lead to the liberalization of the global market of agriculture. As agriculture plays an important part in many of the developing countries, opening of the agricultural market would be a major contribution to wards the elimination of poverty.
Uruguay Round: After this the potential for more global trade in developing countries increased. The market accessibility pertaining to agricultural sector, manufacturing sector, and services sector was enhanced. It also established new and improved rules pertaining to the trading system, and agriculture.
Opening Markets is opening opportunities: The open markets of the developing countries would be the assurance of long-term economic growth for the same. The developing countries need to participate in the trading system and global economy. The new global trade negotiations would be helped by the new WTO global trading system, which puts the developing nations parallel to the developed nations
Consumer Benefits: With the open market policy the consumers have more and better options to choose from
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After a series of headline-grabbing statements about the possibility of “switching” European consumers over to American gas, the US media hastened to announce the launch of Obama’s oil and gas offensive against Russia. In reality, the EU is not prepared, neither technically nor in terms of price, to buy its energy resources from the US. It would take at least ten years to adapt even the technically advanced German energy system to work with American gas supply.
Professor at Columbia University. Recipient of the Nobel Memorial Prize in Economic Sciences in 2001 & the John Bates Clark Medal in 1979. Author of "Freefall: America, Free Markets", "The Sinking of the World Economy", "Globalisation and its Discontents" & "Making Globalisation Work".
Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. IMF’s Chief Economist from September 2003 to January 2007. Inaugural recipient of the Fischer Black Prize.