Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
Removing trade barriers or restrictions set by the government is known as liberalisation. With liberalisation of trade, developed countries will be able to flood the markets of the developing countries with their goods. So companies in developed countries will be able to produce more and prosper.
Suppose the Indian government puts a tax on imported goods , then the price of the goods will be higher for the consumers. As a result, the consumers will prefer to by goods produced locally. Consequently their will be no demand for imported goods and developed countries will not be able to sell their goods in developing countries.
In return for liberalisation of trade laws , producers in developing countries are demanding ‘fairer rules'.
In India the producers are demanding, that the Government should ensure that Labour laws are properly implemented and the workers get their rights.
The government should support small producers to improve their performance till the time they become strong enough to compete. If necessary, the government should use trade and investment barriers the protect small producers. The government should negotiate at the WTO for ‘fairer rules'. It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO
What are the various ways in which MNCs set up, or control, production in other countries?
How has liberalisation of trade and investment policies helped the globalisation process?
What was the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.