Trade Liberalization: Challenges And Barriers To Trade Liberalisation

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Some statistics show that about 75 developing countries and those who are in transition fit the representation of shortfall in trade liberalisation. These countries predominantly hinge on the production of traditional commodities as oppose to countries that embrace free trade and specialise in producing a wider range of goods. The marginalisation of these developing countries is believed to be caused by severe structural problems, poor political frameworks and home refuge.
To eliminate obstacles and barriers in free trade, governments often aim to find strategies and ways to implement trade liberalisation by introducing various policies and tactics that help to promote free trade internationally. Barriers to trade possess a major problem to
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These particular barriers are classed as non-tariff barriers. A great example of NTB is the level of quality demanded by the country to limit its imports in a way where a foreign producer might not be able to meet the required standards. Alternatively, countries can also disturb free trade through customs policies. This method requires foreign countries to fill out excessive amounts of paperwork that can take up to months to complete. In a nutshell, these NTB’s work as a disincentive for foreign producers to export and can impose more or less an equal burden to a tariff or a quota. Governments could also potentially eliminate these barriers in order to promote free …show more content…
This specific action is known as a unilateral promotion of free trade. It decreases the import prices, which allows foreign producers to export more. On the other hand it often frustrates domestic producers, because they don’t possess the same advantage with countries that they wish to trade with. Alternatively two countries may come to an agreement for the same purpose of minimising barriers. This would now be known as the bilateral strategy. A strategy that works on the basis of one country reducing barriers to trade without any expectation of receiving the same benefit in return. Ultimately, many countries can unite and form a multilateral group to reduce trade barriers and promote trade liberalisation. One of the more common examples of such act is the ‘Northern American Free Trade Agreement’. This particular agreement has established no trading barriers between US, Mexico and Canada which enables free trade between these countries.
In conclusion, foreign trade is a massive incentive for the developing countries. This is because it gives the opportunity to specialise in specific goods which in return can lead to a possession of a comparative advantage and thus help a particular country to enhance their levels of production hence yielding to a greater output of exports. Although trade liberalisation is an objective for many nations around the world, it works more to one’s advantage

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