Trade Seen as an International Board Game - Essay Example

How can international trade between countries be described as a strategic game? In such a game, when will trade occur? The world economy has grown in recent years. International trade has been the motivating force behind it. But with the more recent technological developments as well as reduced trade blockades, growth in trade is definitely on the rise. Developing counties have also stepped on this bandwagon, extracting the best out of their own respective economies through trade internationally as well as locally - within the country. The integration of trade into the world economy has really proved helpful for the developing countries as they can promote economic growth, development as well as poverty reduction within themselves. World trade has been increasing at an average rate of six percent for the last 20 years, which is twice the rate of world output. The integration of the world economy with the help of trade has lifted the living standards of the people within these developing nations, which is a positive sign. Sustained and consistent economic growth requires policies that can open trade and investment with the rest of the world. There is proof to it and it is that there has not been a single nation that has achieved economic stability without being open to the world for trade. International trade requires liberalization, i.e., openness to all and sundry within the world no matter what. The living standards are in direct proportion with them. There is a high need to promote and liberalize the manner in which trade is carried out within the world economy. It needs to be more generous to everyone and anyone as well as helpful for the developing nations so that more and more trade is carried out between the economic world markets. Agriculture is one such example of being more liberal for the international trade market. Liberalization by both industrial and developing nations is necessary to realize trade’s potential that acts as a driving force for economic growth and development. It is up to the industrial and developed nations to be more broadminded towards the developing ones so that trade barriers are removed in the wake of open trade between all the countries listed in the economic world. Some countries seem to benefit more than the others in the liberalization and globalization of trade. There of course, seem to be many losers as well as winners in this regard. But all in all, the development efforts they employ to the developing countries are a real plus for these nations. Countries that open their doors to the international economies have over the years enjoyed a considerable amount of growth and poverty alleviation. Free trade has really benefited them in the long run and will continue to do so for them while for those, which remain narrow-minded and keep themselves away from the international economies remain alone in their own gloom of poverty and illiteracy, i.e., in developing countries. Trade liberalization proves very helpful for any country’s economy but it encompasses within itself some negative factors like the increased food insecurity. Before trade was made liberalized, say for a particular country, the agricultural activities mainly emphasized on the production from local market but now all sorts of food products seem to enter in the local arena, which really has an insecure effect on the local man. There also seems to be a wide gap between the developing nation’s globalization and liberalization policies as opposed to the poverty that it has. The UN Human Development Report of 1999 proved that the rich are becoming even richer while the poor community is becoming more and more inferior. This seems to really have a negative effect on the developing countries’ ideas of entering into the international trade market because they would first seek refuge for their own men of the country then only think about capitalizing on their strengths and trade markets. If looked from a different angle, this seems to be quite rational, all one can do with respect to the industrial and developed nations is to encourage these developing ones more and more by granting them funds and the like so that their basic problems can be solved as well as their entrance into the international trade market is made easy and without any hiccups. GATT has been a specialized agency of the United Nations ever since its establishment in 1948. It was built as a temporary measure before the creation of International Trade Organization. The idea behind building the latter was laid to rest and GATT thus started to function as an agreement making body on tariffs and trade around the globe till the end of 1995. It aimed at basically reducing the tariffs as well as other hindrances, which grew up in the way of international trade between different countries of the world. This also comprised of the discrimination, which was meted out to the nations in international commerce. It sets its mission on finding out the ways in which mutual extensions can take place between the nations of GATT so that tariffs could be minimized for them substantially. It did not concern itself with development at any level whatsoever. Meanwhile, GATT conducted meetings between its members to meet its aims and objectives for which it started the whole process. The Agreement was quite successful in protecting domestic industries in the wake of lowered tariffs and elimination of import quotas. GATT was also a major force behind the provision of a framework for most worldwide tariff dealings in the period spanning between the years 1947 and 1994. Whether or not GATT was able to achieve its objectives is a thing of the past now. Different countries have different perceptions about it and it would not be wrong to state that the world is much better without GATT being in place. It only made matters worse for the nations tied to each other through trade. The French Government thought that the whole process of GATT was very burdensome and awkward to handle and understand. It was in total opposition to its very existence. The rest of the world did not agree with this French notion. NAFTA is the other agency, which is now in place working at reducing the tariffs and trade restrictions for its member countries around the world. The people who used to oppose GATT for its policies are in favor of NAFTA and the ones with GATT are in total disagreement with NAFTA. The WTO, standing for World Trade Organization, is an international one, which was established in 1995 as a consequence of the GATT negotiations, that was termed the Uruguay Round. Unlike, GATT, which focuses on reducing tariffs on trade and eliminating discriminatory attitude between its member countries, WTO has the added responsibility of keeping an eye on the policies of carrying out trade between different nations. WTO is also accountable for handling trade disputes, which happen amongst its member countries. Apart from all this, it helps the GATT in enforcing its agreements in every possible manner it can. GATT is no more but its policies are still in place by certain countries. WTO is a permanent body unlike the GATT but not a specialized agency of the United Nations. WTO always looks at reducing the subsidies and quotas on imported farm produce, automobiles and textiles. The same were not given any importance by GATT. The rationale behind calling the international trade between countries as a game is that there seems to be too many hindrances in free trade zones. The governmental pressures and the economic shifts plus the added currency changes and drops every now and then are some of the significant reasons as to why we witness a number of difficulties in free flowing trade between the global regimes. The barriers are thus in place so as to apprise one and all that much work needs to be done in this regard and that world trade bodies and organizations have to understand their due role in the proper context of things. It is also true that in such a game trade might never occur as a result of the differences that have thus arisen. Trade can only be made possible when there is a decent enough endeavor on the part of the bodies and organizations to drop down the barriers and pave the way so that the hurdles could be eased out nonetheless. This could only be made possible when the different trade regimes agree on a single principle and for this to happen the understanding in thinking and mindset is of utmost importance. All said and done, it is up to the particular people who are at the helm of affairs within these regimes to understand the manner in which these bodies operate and work under and when they qualify each other on a single platform, then only can one find out the best manner in which countries can move forward and work in unison with each other, for the betterment of the whole international regime related with trade. The need is to understand what is the lynchpin in the whole equation and then to address the same in the proper context. BIBLIOGRAPHY Macewan, Arthur. (1989). International Trade and Economic Instability. Monthly Review Vol. 40 Word Count: 1,530 Read More