Trade Liberalization

11 Key excerpts on "Trade Liberalization"

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  Theorizing Global Studies

  • Darren J O'Byrne, Alexander Hensby(Authors)
  • 2020(Publication Date)
  • Red Globe Press

    (Publisher)

  Thus, the model of globalization-as-liberalization is inherently under-pinned by the philosophy of liberalism. Liberalization is the process through which borders between states are being eroded, allowing for an easier flow of capital, goods, ideas and people. In the process of liberalization, the nation-states themselves remain, but with their regulatory powers largely diminished (Ohmae 1994), they exist primarily as political entities increasingly subservi-ent to the ‘invisible hand’ of the marketplace (both economic and ideologi-cal). Liberalization thus entails both the globalization of the marketplace, the opening up of economic activity through the breakdown of trade barriers, and a kind of benign homogenization, as the ideologies of capitalism, democ-racy and the protection of civil and political freedoms are exported around the world, rendering it increasingly interdependent. Within Global Studies, of those espousing the belief in globalization as liberalization, the former is associated with numerous neo-liberal economists, of whom Ohmae (1990, 1994) and the British Conservative Party politician John Redwood (1994) are among the most significant, while the former is associated primarily with the political theorist Francis Fukuyama (1991). 2.3 The theory of the free market The definitive position on the necessity of the global marketplace is usually attributed to Adam Smith. Smith was an eighteenth-century economist and moral philosopher whose huge and immensely influential text, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) is considered to be the crucial statement of classical liberal economics. Ultimately, and in true LIBERALIZATION: A BORDERLESS WORLD 37 liberal fashion, Smith saw it as an economic defence of individual liberty and self-interest. Smith is famous for introducing the term ‘the invisible hand’, although this has largely been popularized by his followers rather than Smith himself.

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  Report on the World Social Situation 2010

  Rethinking Poverty

  • (Author)
  • 2010(Publication Date)
  • United Nations Publications

    (Publisher)

  97 Chapter VI Economic liberalization and poverty reduction Economic liberalization encompasses the processes, including government policies, that promote free trade, deregulation, elimination of subsidies, price controls and rationing systems, and, often, the downsizing or privatization of public services (Woodward, 1992). Economic liberalization has been central to adjustment policies introduced in developing countries since the late 1970s, mostly in the context of the conditions for lending set by international finan- cial institutions. Thus, government policies were redirected to follow a non- interventionist, or laissez-faire, approach to economic activity, relying on mar- ket forces for the allocation of resources. It was argued that market-oriented policy reforms would spur growth and accelerate poverty reduction. From this perspective, government intervention in markets is seen as both inefficient and distortionary. It is argued that even if an interventionist State acts with good intentions, it does not have the competence to manage the economy well. By moving scarce resources into less productive economic ac- tivities, the State is thought to reduce overall economic growth, with adverse consequences for poverty reduction. Additionally, for public choice theory, rational, self-interested individuals maximize their economic benefits and overall economic welfare. In civic life, politicians, bureaucrats and citizens are all considered to act solely out of self- interest in the political arena. Politicians and State bureaucrats, acting from self-interest, use their power and the authority of the Government to engage in rent-seeking behaviour, which distorts the allocation of resources and results in disincentives for private investment and entrepreneurship (Buchanan, 1980). Therefore, the power of the State and political actors, including the ability to intervene in the economy, should be limited.

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  Reforming the Reforms in Latin America

  Macroeconomics, Trade, Finance

  • NA NA(Author)
  • 2016(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Second, this process is based on static compara- tive advantages and short-term gains in resource allocation, but benefits fade-out if it is concentrated in areas of activity whose world markets are more sluggish and/or less intensive in technological inno- vation. Third, in financial markets and on the capital account of the balance of payments, the recent move towards capital markets deregu- lation has hampered the reallocation of resources which was supposed to be brought about by Trade Liberalization because, under the condi- tions prevailing in the 1990s, it has been conducive to sharp exchange- rate appreciation and high real interest rates. These factors discourage the productive investment needed to bring about structural change, and cause resources to move away from the production of tradables and to concentrate more in purely financial investment. (b) Trade Liberalization programmes in Latin America Many countries in the region have undertaken Trade Liberalization reforms in recent years. Eight of the nine countries shown in Table 3.1 - all but Costa Rica - introduced reforms that could be described as drastic and abrupt. Moreover, in seven of these eight countries - the exception is Chile - import liberalization was carried out within a period of just two or three years (1989-90 to 1992-93). Argentina implemented the bulk of its liberalization programme in April 1991. In Chile, the process took 5 1/2 years (from late 1973 to mid-1979). In all cases, albeit to varying extents, quantitative restrictions have been dismantled and tariffs have been lowered significantly. Generally speaking, the amount of tariff protection provided differs conSiderably from its pre-reform levels, and the spread of rates of effective protec- tion has diminished substantially. No country has yet adopted a tariff rate of zero, however, and only Chile has a uniform tariff (currently 11 per cent).

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  Small Developing Countries and Global Markets

  Competing in the Big League

  • W. Kennes(Author)
  • 2000(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  30 3 Unilateral Economic Liberalization In assessing the membership of the WTO from the perspective of small developing countries, it was concluded earlier that this membership does not settle many policy matters that must be dealt with regarding beneficial integration into the world economy. The framework offered by the WTO is only a starting-point and needs to be complemented by further economic policy decisions. WTO members can still maintain relatively closed economies. It has been noted that many developing countries entered the WTO with high tariff bindings. They can also continue to impose trade restrictions, for example on balance-of- payments grounds, relying on special and differential treatment. All in all, developing countries that have become WTO members must still make a variety of policy choices in order to achieve openness. Some choices relate to the sequencing and the speed of economic liberaliza- tion measures. Countries must also choose whether to move towards openness in a unilateral way or in a regional integration grouping. Whether openness is pursued unilaterally or regionally, it will increase interdependence and lead to constraints on economic policy. The size of the economy will affect the advantages and costs of these choices. For many small developing countries, macroeconomic policy reform takes place in the context of structural adjustment programmes (SAPs) formulated and implemented in collaboration with the World Bank and the International Monetary Fund. Trade Liberalization has invariably been a key component of SAPs. Small developing countries are more affected by interdependence resulting from increased openness than large ones. This chapter examines the strategy of unilateral economic liberaliza- tion from the point of view of small developing economies. The main areas of liberalization are trade policy, investment regulations and pay- ments mechanisms.

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  The Future of International Law

  Global Government

  • Joel P. Trachtman(Author)
  • 2013(Publication Date)
  • Cambridge University Press

    (Publisher)

  9 Economic Liberalization: Trade, Intellectual Property, Migration, and Investment Economic globalization is the integration of markets for trade in goods and ser- vices, labor, capital, and intellectual property. Free movement of the factors of production generally increase overall public welfare, and constitute pub- lic goods. Although the optimal extent of protection of intellectual property depends on the context, protection of intellectual property can also increase welfare, and constitute a public good. However, it is possible for states to confer negative externalities on other states through the imposition of barriers to movement of these factors, or through the failure to protect intellectual property. Furthermore, each reduction of barriers to trade produces both win- ners and losers, so each reduction is asymmetric in its benefits. This chapter evaluates how international law can respond to these externalities and dis- tributive concerns, and promote the efficient creation of global public goods. Free movement of factors and protection of intellectual property cannot be separated from one another, nor can they be separated from other global con- cerns, including protection of the environment, human rights, health, and security. As in other areas, when we examine the reasons for international law in this area, we must recognize the distinction between economic welfare (public interest) and political welfare (public choice). As in Chapter 3, we assume that economic welfare is one vector in determining political welfare, and that in different states there will be different degrees of congruence between economic welfare and political welfare. In the fields of economic liberalization addressed in this chapter, we see important reasons for establishing international law, and for establishing some components of international organization.

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  Globalization And International Trade Policies

  • Robert M Stern(Author)
  • 2009(Publication Date)
  • World Scientific

    (Publisher)

  There are, of course, other ways that a country could potentially be affected by another country’s Trade Liberalization, other than through the terms of trade. But these other mechanisms are less well understood both theoretically and empirically, so we will only say a few words about them, in the concluding section of the paper. In Section II we take our first two passes at the question by using one of the oldest tools of international trade theory: the offer curve. From this we will see first how an excluded country might easily be expected to benefit, not lose, from Trade Liberalization by other coun-tries. But on more careful inspection, the same tool will suggest that such a benefit is conditional on the relative extent of liberalization by two subsets of the other countries: those who export the same good as the excluded country, and those who import it. Indeed, much depends on the degree to which the included countries reduce their tariffs on the good or goods of export interest to the excluded country. In Section III, instead of simply taking as given the tariff cuts of included countries, we then ask in which sectors these tariff cuts are likely to occur. A simple “political economy” model suggests that tar-iffs are not likely to be cut on the products that excluded countries happen to export, thus making it more likely that they will lose from Trade Liberalization by other countries. This theoretical result is of course motivated by the common observation that developing coun-tries today face higher tariffs than developed countries, a fact that, on this interpretation, can be attributed to the developing countries’ own collective choice to exclude themselves from Trade Liberalization. In both of Sections II and III we assume that, when included countries do lower their tariffs on particular goods, they do it on imports from all other countries, even the excluded ones.

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  After the Washington Consensus

  Restarting Growth and Reform in Latin America

  • Pedro-Pablo Kuczynski, John Williamson, Pedro-Pablo Kuczynski, John Williamson(Authors)
  • 2003(Publication Date)
  • Peterson Institute for International Economics

    (Publisher)

  The East Asian ex-perience suggested that moving an economy onto an outward-oriented growth path required more than Trade Liberalization. Similarly, there was enough evidence that the results of the trade policy reform process would partly depend on whether it was led by import lib-eralization or export expansion (Agosin and Ffrench-Davis 1993). Despite this broad consensus, however, the predominant policy mood in the re-gion relied too much on straightforward and simplistic policy recommen-dations that placed excessive emphasis and expectations on a single pol-icy instrument: Trade Liberalization. The Extent of Trade Policy Reform During the past 15 years, Trade Liberalization in Latin American countries has proceeded through the elimination of nontariff barriers (NTBs), the reduction of applied tariff rates, the enforcement of multilateral disci-plines, and the forging of more substantive and encompassing preferen-tial trade agreements (PTAs). These four ingredients combined to produce a significant shift toward more open trade regimes. NTBs—by far the most distorting device used during the era of import substitution—deprived trade regimes of transparency and created incen-tives for rent seeking and corruption. In countries such as Argentina, Brazil, and Mexico, nominal tariff rates were largely irrelevant; typically, published rates and the duties that were effectively collected bore little re-lation to each other, because trade regimes were a compound of ad hoc measures, exemptions, and special treatments. The removal of NTBs dur-ing the 1990s was quite remarkable, making Latin American countries on average more moderate users of NTBs than other developing countries (Michalopoulos 1999). Remedial protection became more widespread in the 1990s, but with the possible exception of Mexico, it was less intense than in some industrial countries. Parallel to the removal of NTBs, applied tariff rates fell markedly.

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  Free Trade In The World Economy

  Towards An Opening Of Markets

  • Herbert Giersch(Author)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  5, 1982, pp. 159-169. TAYLOR, Lance T. , Stephen L. BLACK, 11 Practical General Equilibrium Estimation of Resource Pulls Under Trade Liberalisation 11 • Journal of International Economics, Vol. 4, 1974, pp. 37-58. TULLOCK, Gorden C., 11 The Welfare Costs of Tariffs, Monopolies and Theft 11 . Western Economic Journal, Vol. 5, 1967, pp. 224-232. TUMLIR, Jan, The Contribution of Economics to International Disorder. Harry G. Johnson Memorial Lectures, 2, London 1981. WADE, Robert, 11 The Role of Government in Overcoming Market Failure: Taiwan, South Korea and Japan 11 • In: Helen HUGHES (Ed.), Ex-plaining the Success of East Asian Industrialisation. Cambridge, Mass. , forthcoming. WHALLEY, John, Trade Liberalisation among World Trading Areas. Cambridge, Mass., 1985. 236 Comments on Deepak Lal and Sarath Rajapatirana. Foreign Trade Regimes and Economic Growth in Developing Countries Lead Discussants: Burnham 0. Campbell A major problem confronting economists at this conference seems to be that most of us are convinced that freer trade leads to greater economic growth, but that we have not been as successful as we would wish in convincing those who can take action of this position. The present paper by Deepak Lal and Sarath Rajapatirana, by reviewing the evidence and some of the arguments for a positive relation between greater openness and sustained higher growth, shows, in part, why we have been less successful than desired. Most importantly, we still lack a tested, formal, theoretical explanation of the relation between export growth and eco-nomic growth and so must argue our position on the basis of empirical 11 associations 11 -subject to different interpretations and varying over different country groupings or intuitive, but theoretically well-grounded, considerations. The latter, while often persuasive, do not close off similarly persuasive arguments for other trade policies.

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  Global Governance, Development and Human Security

  The Challenge of Poverty and Inequality

  • Caroline Thomas(Author)
  • 2000(Publication Date)
  • Pluto Press

    (Publisher)

  CHAPTER 5 Liberalisation of Trade, Finance and Investment In the last chapter we saw how IFIs, particularly the IMF and the World Bank, promoted the structural and institutional reform of national economies. In so doing, they created an environment conducive to the extension of the liberalisation project, which lies at the heart of the neoliberal development strategy of global economic integration. In the 1980s and 1990s, a range of actors, including not only the IFIs but also various other arms of the UN family, private banks and corporations, and business associations, promoted the liberalisation of three key areas: trade, finance and investment. Here, we focus on major policy developments during that period in each respective area, reactions to these developments, and consequent global policy responses. Trade Liberalisation Together, we [the IMF and the World Bank] must work with and support the work of the World Trade Organisation which is so critical to the trading arrangements and future of our client countries. (Wolfensohn, 1999a) Trade can support livelihoods: production for export can generate income, employment, and foreign exchange which poor countries need for their development. But without adequate safeguards, trade can also destroy livelihoods, cause environmental destruction, or lead to unacceptable levels of exploitation. (LeQuesne, 1996: 1) Trade Liberalisation at the Global Level: From GATT to WTO This section begins with an exploration of global-level trade liber-alisation, looking at the evolution of the General Agreement on Tariffs and Trade (GATT) into the WTO. Consideration is given to the expanded agenda of the WTO, and questions are asked about in whose interests this agenda is working. This is followed by an examination of regional free trade. A focus on the NAFTA experience enables us to explore how effectively trade agreements 69 take on board the concerns of critics such as environmental and labour groups.

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  International Relations

  Perspectives, Controversies and Readings

  • Keith Shimko(Author)
  • 2015(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  The pursuit of individual advantage is admirably connected with the universal good of the whole. ” 11 Here, the liberal roots of free trade are most apparent. One of the key assumptions of liberalism is the existence of a harmony of interests. This is 138 Chapter 6 Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. also the underlying assumption of free market capitalism in general and free trade in particular: Each individual and nation pursuing their own economic interest results in a long-term situation where the interests of all are advanced. There is no conflict in terms of the economic interests of individuals and nations. In promoting economic efficiency, a system of free trade benefits all. To use some technical terminology, international trade is not a zero-sum game in which one nation ’ s gain is another ’ s loss, but rather a positive-sum game in which all benefit. Economist and Nobel laureate Paul Krugman, a leading advo-cate of free trade, emphasizes the harmony of interests in an essay with a tell-ing title: “ The Illusion of Conflict in International Trade. ” If trade is treated as something involving conflicts of interests among nations, Krugman fears that “ trade will be treated as war, and the current system of relatively open world markets will disintegrate … .

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  Justice at a Distance

  Extending Freedom Globally

  • Loren E. Lomasky, Fernando R. Tesón(Authors)
  • 2015(Publication Date)
  • Cambridge University Press

    (Publisher)

  On the question of wages, the evidence seems to show a number of things. Labor markets need flexibility to adjust to comparative advantages. 29 Geoffrey J. Bannister and Kamau Thugge, “International Trade and Poverty Alleviation,” Finance and Development (December 2001), 50. 30 See Jean-Cartier Bresson, “Economics of Corruption,” OECD Observer (May 2000); available at: http://www.oecdobserver.org/news/fullstory.php/aid/239 (accessed January 12, 2007), and Joseph Contreras, “Argentina’s Fiasco,” Newsweek, December 21, 2001. 31 The astute reader notes that we avoid the term “neoliberalism,” preferred by critics of free trade and globalization. It is in truth a derogatory term devoid of any serious scientific meaning. 32 See, e.g., Bhagwati, In Defense of Globalization, 55. Trade Protection by Rich Countries 159 If firms are too constrained by labor laws from reducing their work forces, then the poor may suffer as a result. This is ironic, given that supporters of strict labor regulations claim to act on behalf of the poor. 33 Also, the gap between the wages of skilled and unskilled workers may increase, but this is hardly an objection to the claim that the poor as a class benefit from Trade Liberalization. The objection that liberalizing trade will reduce government revenues and thus its ability to fight poverty is also misplaced because it ignores the dynamic effects of Trade Liberalization. If Trade Liberalization pro- duces growth, taxable incomes will grow as well, and government revenues will grow with them. And independently of whether the poor are able to export (i.e., independently of whether or not foreign markets are open to the goods they produce), the poor benefit from having a wider variety of avail- able imported goods to consume either because the product was not available domestically or because trade lowers the price of the product, bringing it within the reach of the poor.

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