Relationship between Trade and Development

Introduction/Background on trade Trade and development relate considerably. They are able to influence the fates and providences of each other. Modern techniques of transportation, transactions, and communications have enhanced the growth of international trade.Advertising We will write a custom essay sample on Relationship between Trade and Development specifically for you for only $16.05 $11/page Learn More Records retrieved from GATT, WTO, OPEC, and other international trade organizations have shown tremendous relationships between trade and development (World Bank 364). This report discusses how trade can be a pro-developmental provision and the relationship between the two groups. Usually, the relationship between a country’s trade and its economic development has always been a subject of interest. For example, developing states possess strong trade relations with other countries globally. Views of Different Schools of Thought According to Ad am Smith in his classical theory, free trade often leads to efficient use of a country’s resources. Contextually, it is important to agree that free trade improves economic performance by increasing competition of the concerned entities. Current prospects for a new WTO agreement are to enhance international trade by uplifting probable barriers, which the GS would like to keep. Different parts of the world will fare well while Africa will benefit through magnificent developments. Additionally, various countries should embrace the aspects of specialization and division of labor in order to enhance their output. For example, it is agreeable that trade and development are linked either positively or negatively depending on how a country establishes and utilizes its trade opportunities. Trade triggers the aspects of development since different entities can attain their respective developmental needs through it. Numerous countries have attained their developmental ideas and materia ls through integrated trade and other relevant provisions. It is possible for a given country to attain what it does not produce through trade (Greenaway 49). For example, these provisions have been supported by GATT/WTO, OECD, OPEC, and other prominent organizations established to promote the aspects of global trade and other concerned provisions.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Different hypothesis, theories, and models Numerous theories exist in order to unveil the relationship between trade and development. Additionally, there are particular theories that explain various aspects of trade and development. These have helped in relating the two factions together and enhancing the relationships alleged between them. Additionally, hypothesis has been formulated to trigger viable research regarding the alleged relationships. It is important to enhance the aspects of trade and development in order to propel the prosperity of the concerned countries, regions, and organizations. Theoretically, trade enhances development in various organizations, regions, and countries. This is a critical concern when scrutinized critically. It is from this context that the entire business prospects and other relevant provisions lie. Additionally, trade models can influence the nature of development, which a country assumes. Arguments for and against the above theories Theories supporting the relationship between trade and development are vital in this context. For example, it is agreeable that numerous countries globally have exploited the opportunities fronted by trade in order to develop tremendously. This has been quite important in diverse contexts. Hypothetically, it is important to illuminate the alleged relationships (UNCTD 65). Nonetheless, there are arguments that might defy the positions assumed by the mentioned theories. It is agreeable that there can be no relat ionship between trade and development as alleged by some theories. Some countries can develop minus the assumed trade. There are various avenues through which organizations, entities, and some countries can develop minus trade. Current issues facing trade and development relationships There are various issues facing trade and developmental relationships. Some of these factors have contributed negatively to the mentioned provisions. Contextually, they have affected the wellbeing of the alleged relationships between trade and development indicated before. Contextually, market access is one of the issues affecting the aspects of trade. For example, access to markets in developed countries can enhance the aspects of development thus help in reducing poverty. This indicates how trade relates positively to development. The current prospects for the new WTO are to enhance the flowage of trade among the member countries globally. For examples, several Asian, American, African, and European countries have joined the organization in order to open up their markets, enhance international trade, and promote their developmental issues. Previously, GATT was signed in 1946 and lasted until 1993.Advertising We will write a custom essay sample on Relationship between Trade and Development specifically for you for only $16.05 $11/page Learn More The organization was then replaced by the WTO in 1995 to open up markets and enhance accessibility. For example, WTO handles the global rules of trade amid nations. Principally, it ensures that trade flows as efficiently, predictably, and liberally. It thus promotes the relationship between trade and development. Additionally, various countries are influenced by varying political factors. This eventually affects the aspects of development in case such factors are unconstructive. The situation is critical in various contexts (Babkina 84). The political situation of any given region can affect the mentioned de velopment besides the ability to hinder the needed universal trade provisions. It is recommended that the concerned countries endeavoring to enhance their trading opportunities should adopt substantial political provisions in order to favor their trading endeavors. Nevertheless, for the least-developed countries (most of the African countries for example), the principal problem is not market access, but inadequate production capacity to attain new trading opportunities. Another issue influencing the relationship between trade and development is the trade barriers. For example, high tariffs imposed on agricultural goods and other prominent commodities have discouraged diversification and developmental endeavors. Additionally, strong and complex tariffs have blocked the mentioned market access and development provisions. Another hindrance to the mentioned relationship is the lack of capacity. For example, some countries have poor infrastructures. This eventually hinders the aspects of trade and other relevant developmental issues. Another issue facing the trade and development relationships is the legal matters governing the aspects of trade. These can be enacted locally or internationally as evident in the GATT and WTO’s contexts. Uncooperative legal matters can hinder the aspects of trade. This will eventually affect trading provisions. It is crucial to consider these cases in the context of trade and development (Lee 36). Similarly, the rules set by international trade organizations have influenced the relationships between trade and development (Narlikar 59). There are some countries which are barred by such legislations in the context of trading. Some countries have been banned from international trade due to misconduct or failure to adhere to some stipulated rules and regulations.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This provision has eventually affected the aspects of development in such countries. Additionally, independence attained by various countries has also influenced the aspects of trade. For example, development was historically perceived as a problem to be solved by foreign aids and loans from developed countries in the East and West. Another considerable issue in this context is the aspects of technology. Technology has enhanced transactions, international cash transfers, communication aspects, and transportation of commodities from one region to the next. This provision has eventually influenced development as alleged earlier. Through technology and trade, it is possible to attain development (OECD 63). Any factor that influences the provisions of trade eventually influences developmental issues. Another issue is globalization. It is evident that globalization has enhanced the aspects of international trade hence eventually influencing developmental issues in various countries, regi ons, and organizations. Globalization has massively influenced the relationships between trade and development by expanding their provisions and elaborating the nature of the concerned relationships. Concurrently, social and cultural issues can actually influence the relationship between trade and development (Ajami 46). Various communities, regions, and countries have their social and cultural provisions, which can influence their participation in trade and other relevant provisions. Negative social and cultural provisions have always hindered trade and developmental issues. Personal Opinion Critically, it is important to agree that trade and development have considerable relationships as indicated earlier. It is obvious that the promotion of trade will eventually enhance developmental provisions despite the challenges. This is a critical provision as exhibited before. The approaches given to these factors have influenced their fates in the trade and developmental contexts. This is a critical provision indicating the relationship between trade and development. The schools of thought bestowed to this topic have considerable disparities in their provisions. No approach is appropriate as alleged; nonetheless, it is important for each provision to discern prospected relationships between trade and development. Various opening markets have influence the aspects of trade and operations of WTO. Continents like Africa have benefited considerable from the aspects of trade and development. Conclusion Conclusively, there is substantial relationship between trade and development. Several schools of thought have tried to discern this allegation. Nevertheless, theories, hypothesis, and models endeavoring to discern the relationship between trade and development are evident in this context. Concurrently, there are current issues facing trade and developmental relationships. Evidently, trade can be a pro-developmental provision. Works Cited Ajami, Riad. International Busines s: Theory and Practice. Armonk, NY: M.E. Sharpe, 2006. Print. Babkina, Ankras. World Trade Organization: issues and bibliography. Huntington, NY, Nova Science Publication, 2000. Print. Greenaway, David. The World Economy: Global Trade Policy 2011. Oxford: Wiley-Blackwell, 2012. Print. Lee, Byung-Hwa. Fdi from Developing Countries: A Vector for Trade and Development. Paris: OECD Publishing, 2002. Print. Narlikar, Amrita. The World Trade Organization: A Very Short Introduction. Oxford: Oxford Univ. Press, 2005. Print. OECD. World Economic Situation and Prospects 2010. New York, NY: United Nations, 2010. Print. UNCTD. Commodity Prices, Capital Flows and the Financing of Investment. New York, NY: United Nations, 2008. Print. World Bank. World development indicators 2010. Washington, DC: World Bank, 2009. Print. This essay on Relationship between Trade and Development was written and submitted by user D'KenNeraman1 to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.