Helping Developing Countries Policies

In the class, some classmates discussed the Adam Smith’s “The Wealth of Nations”. I have kind of same opinion with it. I think the trade of world should be open and free; then every nation can get their biggest profits by international trade. Moreover, world’s economics is not zero-sum game. I think the world’s economics is no limit; nations can get more profits via free trade.

Why is it so important for developing nations to be involved in trade, and what institutions and policies exist to help developing nations? I think that developing nations have some advantage, such as labors and raw material, is developed nation don’t have. In these reasons, that developed nations help developing nations to trade widely without barriers is very important. So the WTO has special program to help developing nations, such as IMF, World Bank, and GSP. All these organization’s goal is helping developing nations. They help developing members to improve their skill of produce and build schools and hospitals. They believe stable economics is the first factor for developing nations to trade widely.

Some critics mention that free trade is not all-win things. Trade liberalization not only affects the allocation of resources of the world, but also affected the rapid development of international trade, the rapid development of international trade; promote the development and deepening of international division of labor and exchange. Although the benefits of free trade, many development economists from the reality of the country's economic development, but that free trade does not necessarily conducive to the economic development of developing countries. The imbalance and inequality of the development process, lead to the development countries facing deteriorating terms of trade, trade preference erosion and other issues; coupled with the long-term decline and short-term fluctuations caused by the impact of the international raw material prices. Also tariff protection and subsidy policies of developed nations are dependent on primary commodities in developing countries occurrence of the phenomenon of international payments imbalances. This complex issue makes the developing countries in the long-term disadvantaged position due to the process of trade liberalization.

However, in my opinion, I think that decrease the barriers of trade and nations can focus on the comparative advantage products that can help all nations to be globalization.