Role of Governments in Assuring that Developing Countries Obtain a Fair and Adequate Share of the Benefits of International Grade
Developing countries have often been overlooked in terms of having a decisive role in international trade and benefits associated with the process. It is obvious that such policies have an effect on trade volume between the developing countries. The movement of goods and services from the domestic to the local market necessitates the participation of the government to ensure protection of both the good sad services. The international trade sector has seen many governments in the developing countries experience artificial obstacles and challenges against free trade between them and other countries. The difficulties and obstacles in the international trade are the import duties together with tariffs imposed on the flow of goods and services, which enter the international market. Other issues are quantitative restrictions in terms of the amount permitted to enter the market, industrial safety, health, safety, and certificates of origin. Systems characterization because of administrative imposition has resulted to commodities becoming expensive. In most instances, the products are produced locally and sold expensively in the local market. Other barriers to trade in the international market for instance are the quota system, which determine the quantity to be imported. Presumably using such a system the importer mostly has to acquire a license before any government is given permission to export any commodity to o another country.
There is a need for developing countries governments embracing policies to ensure an increase of rates of economic growth to protect the international markets or the import substitution policy. It is obvious that domestic savings are inadequate thereby an adoption of aid such as foreign loan from foreign countries to developing countries has been implemented to achieve growth in the international market (Abbott, 234). Any system that is implemented has to serve two main purposes which are the ability to encourage more imports and limited financial resources. Conversely, the economic policy, which depended on import substitution, has failed to attain growth, therefore, necessitating the need for replacement of policies that promote exports. The adoption of such a policy is essential in terms of eradicating the segregation and discrimination in international trade and non-application system protection. Developing countries governments have to establish an integrated financial system and implement prudent economic policies (Reinhart, 250).
Developing countries effectiveness can be enhanced with better coordination among the various governments. The coordination exercise need to begin from the identification interests stage to positions and stands formulation. There is a need for smaller groups in the informal Group of Developing Countries associated with the WTO based on certain issues as well as interests (Narlikar, 267). The formation of such a group is helpful in encouraging full transparency and communication with the other developing countries who are a member of an informal group. At the same time, there might be sharing of the burden in specific areas and information exchange, which will curb efforts duplication and ensure proper utilization of scarce resources. There is a need for coordination, linkages besides networking among the various developing countries governments to ensure active participation in relation to the challenges in the international trade, which involves burden-sharing arrangements among them. Government efforts of developing countries have to be coordinated with those of multilateral central assistance strategies. Such policies and procedures will lead to exports increase to GDP in relation to comparison of economic growth rates. Countries, which have applied the policy’s economy, have achieved economic growth because of the openness’s of the entire process (Abbott, 345). Perhaps the latest trend towards globalization has contributed to the attainment of such policies transparency.
The global level, which is the international trade, has to embrace openness and investment as the main factors to ensure economic growth. It is obvious that the trade barriers often results to a reduction of goods prices trade exchange volume between the developing countries, which has increased consumers goods prices. The aspect has often been a barrier for such countries to take full advantage of trade exchange benefits between them. Despite this, many developing countries often place many barriers and obstacles among themselves for varied reasons such as inefficient companies, which are local producers producer competing with the commodities from other countries associate with high efficiency( Narlikar,345). Such a scenario puts pressure on governments of developing countries to protect goods produced locally from foreign competition.
Developing countries need to endeavor to embrace changes in the process of negotiation in the internal trade to bring greater transparency and extensive participation for them during the process. Various governments from such countries need to come together ad discuss proposals by international trade market and persuade other countries to take into consideration their views to encourage a healthy trade. At the same time, there is a need for wider participation in discussion of barriers and obstacles experienced by developing countries in the international market. Although, there can be challenges negotiating in large groups balance has to work out to embrace efficiency and complete direct participation by developing countries in the negotiating process. Developing countries may deliberate on this issue and make specific proposals for an improved method of negotiations in the WTO (Reinhart, 310). The international trade agreements have a profound impact on developing countries’ economies hence imperative for them not to remain indifferent, but actively take part in negotiations as well as other activities in the forum and ensure they are efficient in the decision-making process.
The developing countries seem to be in a very weak position in terms of negotiations in the international trade market. The weakness has been manifested in different ways, such as them getting less equal treatment in different areas. Developing countries have made noteworthy concessions to developed countries without any benefit with important provisions touching on special and differential treatment not properly implemented. These WTO agreements have manifested larger propositions for the financial system of the country. There is a need for developing countries governments to play a key role in the internal trade process because of its significant effect on the production process. Developing countries need to exhibit political determination and not allow other countries to push them around during WTO forum. At the same time, they need to be resolute and make usage of the forum serve their interests and reduce impacts on them. The countries have to confident, identify their negotiating strengths, and apply them effectively. The biggest negotiator strength in a multilateral negotiation is based on enjoying of full support of their countries in relation to the stance taken by them. Developing countries have to enhance and strengthen their machinery of decision-making and change their negotiation strategy to prepare them comprehensively in the WTO negotiations. Conversely, they need to fight for a total change in terms WTO negotiating process.
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Reinhart, Carmen M. Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries. Washington, D.C.: International Monetary Fund, 1994. Print.
Trends in Developing Countries: Economic Growth, International Development Finance, and International Trade. Washington: World Bank, 1968. Print.