Negative Effects Of Trade Liberalization

752 Words 4 Pages
There are many positive effect of trade liberalization such as the expansion of markets and an increasingly interdependence economic system. For Liberal philosophers, the increasing integration of nation’s economy reduces the chance of a conflict. Through economic increase trade, nations become (economic) allies. For realist, trade liberalization coupled with WTO rules creates a guideline of acceptable behaviors of trade creates a common understanding of these norms, which decrease chances of conflicts. There are also the negative effects of trade liberalization especially in the agriculture sector. As agriculture can be considered to have a multifunction role, such as, the provision of jobs, providing a cultural heritage, and protection of …show more content…
As a result many small producers of goods are forced out of business. As a result, of failed business ventures, the means of maintain a lively hood decrease causing widespread poverty. As countries become more dependent on importation of food, the country becomes increasingly more food insecure. Some of the changes in policy through the transition of the GATT to the WTO are duties that is “transformed into tariffs, and then reduces over the implementation period” (Bonilla, Tinz 252) which decreased the restriction of trade. As protectionism policy is relaxed, cheaper foreign goods are able to flood the market. The dumping of cheaper foreign goods is only benefitting the corporations that is able to undercut all others firms in their marginal cost. As a result of their capitalistic actions, small firms in both the abroad and at home are being harmed. Leading to increase in poverty and urbanization as more move to the city in search of jobs. As a result of trade liberalization, there is a displacement of the population. For Liberal thinkers, an advocate of the free market, and see poor urban condition as inevitable, as prosperity breeds …show more content…
Most favored nation (MFN) is a status granted form one nation to another that signifies the preferential treatment in terms of international trade. MFN is a status that affords you the benefits of a lenient trade policy such as low tariffs. WTO mandates its members to grant each and every member the status of MFN; it creates a non-discriminatory component to trade. WTO does facilitate disputes that impedes on the privilege granted through the MFN status. As a result, MFN status is symbolic of the WTO for realist. Through giving up parts of it sovereignty to WTO in terms of trade through the adoption of granting all other nations MFN, states are the only ones giving WTO their legitimacy. WTO’s actions depend on the member state; WTO can only take the regulatory stance when nations has violated the agreement, as a result of this WTO lacks true power. WTO does not have the ability to confront nations unless there is probable cause and supported by other states, which allows for many developing nation to voice their

Related Documents