The Merits of International Trade

Considering all the difficulties faced by developing countries in adapting to the rules-based system, why do they still remain in the WTO? Since the WTO has been careful to maintain a distance from those who wish to categorise it as a development organisation, why do the Member States still drive negotiations on a development platform especially under the Doha Round? One may ask whether indeed there is a correlation between the creation of trade rules and the attainment of increased opportunities, full employment, welfare gains, poverty alleviation, and higher standards of living. Since these issues are essentially those which are relevant in the domestic social and economic arena, how does multilateral co-operation assist the attainment of such objectives? Do trade rules not in fact undermine the ability of an internal government to decide on a trade and development regulatory structure which will respond to the particular needs and concerns of its internal environment?

This final chapter points to the incontrovertible response to all these questions: that indeed trade does offer an opportunity for development but it is an opportunity which can only be obtained by collective responsibility both at the multilateral, and at the domestic level. The arguments go back and forth on the merits of international trade rules. On the one hand, international regulation for the buying and selling of goods and services under the open trade conditions of the WTO system may adversely affect the national industries without domestic governments adopting restrictive measures to safeguard its domestic trade environment. Thus from one perspective, it could be considered that ‘under certain conditions, open trade in goods leads to factor price equalisation with reduced returns to factors that are relatively abundant in other nations’. An example would be for instance, that should low-skilled labour be relatively abundant outside the United States, open trade in products intensively utilising such labour will lead to lower income for low-skilled American workers. In recent times, there may be more to this argument considering the resurgence of queries on the benefits of free trade and international rules to America which became a key issue in the 2008 American presidential race.