Effects Of International Trade In Developing Countries

INTRODUCTION

Countries all over the world are changing their economies, socials and policies to face globalization. It requires an extensive technological, economic and cultural process to turn a domestic into an internationalized country.

Through international trade, countries can link and unify markets while satisfying their needs for goods and services. International trade basically means exporting (selling abroad) and importing (buying from abroad) merchandise and services (Peng, 2010, p. 62).

Developing countries in their quest to reach an important international marketing status and to overcome their underdeveloped industrial base are looking for strategic partners to trade internationally and to establish agreements of economic cooperation.

Trade internationally benefits countries in many ways. However it entails inherent disadvantages that must be analyzed and overcome. These will be described, studied and dissected on this essay.

EFFECTS OF INTERNATIONAL TRADE IN DEVELOPING COUNTRIES

As result of 2008 financial crisis, economic activity of developed countries has slowed down. According to United Nation Conference on Trade and Development (UNCTAD) 2013 overview, international trade only grew less than 2% in 2012 due to slowdown in developed countries international activity.

International trade has positive and negative effects for developing countries in certain points as in economics, politics, social, environmental issues, working conditions and rights, and quality of life (Balassa, 1984).

CHINA

The rapid economic growth of China is due to their vast natural resources, stable political system, and their abundant labor. International trade has made of China an integrated country with open door policies. Furthermore its international trade growth contributed to the high growth rate of GDP, the improvement of productivity, and technological advancement.

China nowadays is one of the most important global factories in the world by cause of international trade (Sun & Heshmati, 2010).

INDIA

International trade has given to India the opportunity to improve productivity, expanding to international markets, and developing in technological aspects. But economic growth has not turned India into a richest country, instead of that, poverty nowadays is more common in this developing country as result of the inequitable distribution of incomes (UNCTAD, 2013).

India is facing political problems due to the claim from United State Senate to the International Trade Commission (ITC) to investigate India’s unfair trade practices against their exports and investment (Press, 2013).

LATIN AMERICA

Latin America has break through a globalized world by crating blocks of integration and economic cooperation e.g. UNASUR, MERCOSUR. International trade has growth since the countries have signed free trade agreements (Ranis, 2002). Moreover APEC has integrated countries from America and Asia to become a strong economic cooperation alliance.

ADVANTAGES OF INTERNATIONAL TRADE FOR DEVELOPING COUNTRIES

As in every country, international trade benefits economy by increasing domestic resources from those which landed from abroad (Vitez, 2013). The amount of needs is satisfied by external products and services and the oversupply might be fixed with exporting rise. Additionally, developing countries approach new important international markets and gain both influence and economic power by trading internationally (Mohr, 2013).

Moreover, international trade with powerful countries can ensure protection from international threats and the improvement of domestic and external politics (Vitez, 2013). Therefore trading internationally helps to create strategic alliances among countries with the same ideologies,

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