International Trade Theory and Development
Throughout history, international trade has driven economic growth and
prosperity. By enabling countries to specialize in producing certain goods and
exchanging them with other countries, international trade has led to lower prices,
increased productivity, and job creation, which has spurred global economic
development over the centuries.
While international trade has spurred global economic development, its benefits
have not been equally distributed among all countries, and some have struggled to
develop despite increased trade. The unequal distribution of resources, the dominance
of powerful countries in international trade, and the unequal exchange of goods and
services are to blame.
Some countries may have an abundance of natural resources but lack the
technology or infrastructure to extract and refine them for export and vice versa.
Moreover, powerful countries often have more influence in setting the terms of trade,
which can put weaker countries at a disadvantage. Finally, there are also concerns
about the impact of international trade on the environment and labor standards.
Although rich in natural resources such as copper, cobalt, and diamonds, the
Democratic Republic of Congo (DRC) has poor infrastructure and technology. Hence,
95% of their total export revenues are made up of mineral exports (The World Bank,
n.d.). Despite being the world's largest producer of cobalt, an essential component in
batteries, DRC is among the five poorest nations in the world (Vinachem, 2022). DRC is
the perfect example of a country struggling to benefit from its mineral wealth fully.
An example of a scenario in which powerful countries exploit weaker countries is
the case of AGOA. There are arguments that it is a one-sided trade deal that benefits
the US at the expense of African countries.
Bangladesh, on the other hand, has been criticized for its poor working
conditions in the garment industry. Though garment factories make up 80% of the
government's total export revenue, working conditions are deplorable (Pattar, 2020). As
companies seek to produce goods at the lowest cost, low wages, long working hours,
and unsafe factories harm workers and the environment. The garment industry
exemplifies the challenges of global manufacturing (WIEGO, n.d.). These poor working
conditions can lead to high turnover rates and low productivity. Likewise, the negative
publicity and reputational damage caused by poor working conditions can spoil the
country's ability to attract foreign investment and trade.
References
Pattar,
A.
(2020).
The
Inhumanity
of
Bangladeshi
Garment
Factories.
https://intpolicydigest.org/the-platform/the-inhumanity-of-bangladeshi-garment-fa
ctories/
The
World
Bank.
(n.d.).
The
World
Bank
in
DRC.
https://www.worldbank.org/en/country/drc/overview
Vinachem.
(2022).
Top
10
Cobalt
Producers
by
Country.
https://www.vinachem.com.vn/content/market-and-product-vnc/top-10-cobalt-pro
ducers-by-country.html
Woman in Informal Employment: Globalizing and Organizing. (n.d.). Garment Workers.
https://www.wiego.org/garment-workers