Why do developing countries resist global trade agreements?

Devadoss, Stephen

doi:10.1080/09638190600690895

Cited by 17 publications

(7 citation statements)

References 17 publications

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“…Notes: the non-food agricultural trade openness ratio may seem exceptionally high. This is because the non-food agricultural sector represents a very small share of agricultural GDP in developing countries economies provides unfair advantages to their exports (Devadoss 2006). Within this line of thought, the reduction in openness will likely reduce external competition for domestic producers.…”

Section: First Step: the Effect Of Hunger On Food Trade Opennessmentioning

confidence: 99%

Hungry for free trade? Food trade and extreme hunger in developing countries

Mary

2019

Food Sec.

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One of the greatest challenges of the twenty-first century is to ensure that the world population has reliable access to adequate, affordable and nutritious food sufficient to avoid hunger. Agricultural trade liberalization is often considered a central element of economic strategies aiming at improving food security in developing countries. Many, however, argue that most developing countries may not benefit from freer agricultural trade and that liberalization may accentuate food insecurity. From an empirical perspective, little is known about the effects of trade on food security in developing countries. We estimated the effects of food trade openness on extreme hunger in developing countries using a novel two-step approach. First, we estimated the reverse causal impacts of hunger on food trade openness using rainfall anomalies as instrumental variables to generate exogenous variation in hunger. In a second step, we estimated the effect of food trade openness on hunger using the residual food trade openness that is not driven by hunger as an instrument. We found that a 10% increase in food trade openness would increase the prevalence of undernourishment by about 6%. We also found evidence that developing countries reduce food trade openness as a response to increased hunger, suggesting protectionist policies. A percentage point increase in undernourishment prevalence would decrease food trade openness by 0.9%. Our results suggest that countries may be better off adopting food self-sufficiency for some time, despite such actions clashing with World Trade Organization's regulations and current agenda.

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Section: First Step: the Effect Of Hunger On Food Trade Opennessmentioning

confidence: 99%

Hungry for free trade? Food trade and extreme hunger in developing countries

Mary

2019

Food Sec.

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“…Empirical findings of Dollar (1992), Sach and Warner (1995), Harrison (1995), Edwards (1998), Frankel and Romer (1999), Dollar and Kraay (2002), Greenaway et al (2002) and Dufrenot et al (2009) provide a firm support to the hypothesis that trade openness improves economic growth. However, the empirical literature has not yet reached a point of consensus, and developing countries still resist the global trade agreements in the World Trade Organization's (WTO henceforth) ministerial rounds due to the wide disparities between rich and poor countries over several divisive agendas, in particular the bitter disputes over agricultural policies (Devadoss, 2006). Rodrik and Rodriguez (2000) and Rodriguez (2007) argued that studies in which positive relationship between trade openness and growth was found have either measured the trade openness variable wrongly or have used poor econometric techniques, which might have resulted in a positive impact of trade openness on economic growth.…”

Section: Introductionmentioning

confidence: 99%

The role of trade openness for industrial sector development: panel data evidence from SAARC region

Tahir

Estrada

Khan

et al. 2016

Journal of Asia Business Studies

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Purpose – The purpose of this study is to focus on South Asian Association for Regional Cooperation (SAARC) member economies to examine the impact of trade openness on the industrial sector development. Design/methodology/approach – Panel data econometric techniques are used to the data for the period 1980-2013 for the selected six countries, namely, Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka. Findings – It is found that trade openness has positively and significantly influenced the industrial sector of the sampled countries. Other determinants such as education and investment have also played a key role in helping the selected developing countries to develop their industrial sectors. Practical implications – The study suggests the policy-makers of the SAARC member countries to liberalize international trade substantially to enhance the contributions of industrial sector toward gross domestic product (GDP) and to achieve the dreamed goal of sustainable long-run growth for the region. Originality/value – An explicit relationship between trade openness and industrial sector of the SAARC member economies is yet to be examined.

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“…Hence, we believe free trade does not tell the full story. As Devadoss (2006) argues, despite Doha Round, the global trade negotiations have collapsed. One of the main reasons for this is the unwillingness of the developed countries to reduce their enormous…”

Section: Resultsmentioning

confidence: 99%

Trade Liberalization: Is It Desirable for All Developing Economies?: A Literature Review

Bilgin¹

2019

RWE

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Economic theory says all countries benefit from free international trade. However, does this belief tell the whole story? Can all countries indeed benefit from free trade? For instance, is it any good for developing countries? In the literature, there are many studies and some of them present ideas against free trade. In this paper, we strive to provide a brief of the literature on developing economies.Another paper (Dean, 1995) studies the dramatic shift from protectionism toward free trade in the 1980s. During the 1980s, increasing numbers of developing countries liberalized their trade regimes (Dean, 1995). The main reason behind the liberalization story of developing countries was to take full advantage of the opportunities for development through trade. In this framework, South Asia, Latin America, and East Asia have implemented extensive reforms, yet each region has shown a distinct difference in approach and the degree of liberalization achieved. Dean (1995) argues Latin America stands out as moving sharply toward the level of openness of the East Asian Newly Industrialized Countries. However, there is little progress toward free trade in Africa. As a result, over the past 20 years, the growth of world trade has averaged 6 percent per year, twice as fast as the world output.Despite two decades of trade liberalization, the level of the tariffs remains at a high level in many countries; most countries also have imposed some non-tariff barriers. Besides, trade barriers in industrial countries are concentrated in the agricultural and labor-intensive sectors in which developing countries have a comparative advantage. The developing countries' economies are characterized by heavy dependence on agriculture and labor-intensive sectors. Additionally, developing countries impose tariffs on imports from each other that are as high as those they impose on On the other hand, Chikhuri (2014) investigates the agricultural sector role in the African economic development process. The author uses panel data analysis to examine the long-run structural relationships between agricultural trade liberalization and economic growth. The results of the paper support the claim that agricultural growth through

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Why do developing countries resist global trade agreements?

Cited by 17 publications

References 17 publications

Hungry for free trade? Food trade and extreme hunger in developing countries

Hungry for free trade? Food trade and extreme hunger in developing countries

The role of trade openness for industrial sector development: panel data evidence from SAARC region

Trade Liberalization: Is It Desirable for All Developing Economies?: A Literature Review

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