Are African Countries Benefiting from Globalization?

2220 WordsJun 15, 20189 Pages
Introduction: Accent emphasis on trade liberalization is becoming more significant, which is aimed at eliminating tariffs and quotas between trading partners. This analysis look at Africa’s part in international trade, and consider if the continent is benefitting from the globalization of trade today and how the continent can increase their total part of trade. Classical theory of international trade states that different countries benefit from international trade because it increases the market for diverse products. If a country produces more than it needs of a specific commodity, it can export the surplus and make more money than it would if only the domestic market was available. A country can export both raw materials and already…show more content…
According to Thirlwall, A. (2000) the question for Africa is not whether to trade but in what to trade and the terms on which it trades with itself and the rest of the world. Attempts to reduce trade barriers in the past decade Cooperation among nations has become the focus of a wide range of studies in the past decade. International Relations (IR) literature about cooperation has adopted a distinct approach, focusing on the systemic level of analysis and used game theory as its central tool of analysis. Chart below shows a schematic overview of IR theories of cooperation. Source: Wendt (1999): Social Theory of International Politics The General Agreement on Tariffs and Trade (GATT) Uruguay Round covered a wide range of trade issues, but reducing trade barriers for agricultural commodities was a central issue. Subsequent ratification by the United States, in December 1994, and by other member countries established new global trading rules and created the World Trade Organization (WTO) to replace GATT, had contributed to trade liberalization over the following 10 years. In spite of the net economic and social benefits of opening economies to trade, still almost every national government intervenes in markets for goods and services in ways that distort international commerce. The mechanisms by which openness contributes to growth are now better understood by economists, theorists
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