Does trade contribute to poverty alleviation?

Escrito el 19 febrero 2012 por Miguel Aguirre Uzquiano en Economía Global

The fifth of the Ten Principles of Economy written by Gregory Mankiw indicates that “Trade can make everyone better off”.

On one way we may consider that trade contributes to economic growth – the most important factor for poverty alleviation, with examples as South Korea, which liberalized its trade policies in the 1960s and Chile, in the 1970s clearly showing that economies with more open trade policies perform better than those with more restrictive policies. In more recent history, openness has also served the BRIICS countries (Brazil, Russia, India, Indonesia, China, and South Africa) very well.

 The most open segments of the BRIICS economies have done the best, and overall the BRIICS countries have significantly reduced their border protection and expanded their exports much faster than the leading developed countries

On the other side if the developing countries do not protect their infant industries (as developed countries did before them), using high tariffs or import bans the could end up being used only as cheaper labor costs

Fully unrestricted access to the markets of the United States, European Union, Japan and Canada is estimated to benefit Sub-Saharan Africa considerably, leading to a 14% increase in non-oil exports and boosting real income by about one percent. Developing country gains are bigger if they commit to deeper cuts in their own tariffs.

 How do you think developing countries should face their opening to International Trade: Gradually or as fast as possible? Does Trade contribute to the elimination of poverty or the future gains of , e.g. oil trade, will end up in some few favoured hands?


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