Trade Liberalization & WTO: Impact on Developing Countries

Abstract

The international movement towards open markets prompted by the World Trade Organisation (WTO) has its premise that trade liberalization will benefit all those who are concerned. Each country will be able to exploit its position of comparative advantage, once a free and fair trade regime has been implemented. After the Second World War, world trade has been growing continuously due to a number of factors. In particular, the liberalization of trade restrictions and advent of WTO in recent times have expanded the trade between the international communities. This article traces the factors responsible for this phenomenon as well as the impact of liberalization of trade on developing countries.

Keywords: Merchandise trade, globalization, Liberalization, Terms-of-Trade, Subsidy