Case Studies For South Korea, Mexico And Turkey

The general standard for measuring the overall size of the nation's economic activity is the value of gross domestic product (GDP). One of the components of GDP is a measure of the value of exports and imports of goods and services. The hitch is that GDP includes a large component of non-tradable that does not or cannot enter into international trade flows to any significant degree-for example, most buildings and structures, and personal and government services. Consequently, even though internationally traded items such as financial services and travel and transportation services are included in GDP, when we compare the size of the foreign sector with the size of the domestic economy, we end up comparing apples with apples and pomegranates. As a result, comparing exports or imports of goods and services to GDP may understate the importance of international trade to relevant sectors of the domestic economy

There is no doubt that increasing in international trade is supporting the economic growth across the world, raising incomes and creating jobs. However, international trade can also some create economic obstacles, such as the international context and the market policy and regulations of each country, and consequently it can be said that the effects would have positive and negative sides, and it is useful to mention all of them and to take them into consideration.

The Complete Idiot's Guide to Economics © 2003 by Tom Gorma Retrieved on February 27, 2012 http://www.infoplease.com/cig/economics/effect-imports-exports-gdp.html

Many indicators serve to measure the degree of trade openness. The first is designed to assess directly the level of economy openness to foreign trade. The degree of openness measures the level of the external constraint and it is obtained by the ratio of the value of foreign trade on the GDP. The second indicator (distortion) aims to measure the impacts of protectionist policies of a country.

Cuts in protection have increased imports but the increased efficiency has led to a comparable rise in exports. The value of exports plus imports of goods and services has risen from 32% of GDP in 1975 to 48% of GDP in 2000 (ABS), reflecting

Those economically disadvantaged (poor) within a country generally gain from a loose trade. A loose trade is generally a strong positive contributor to poverty reduction. This allows people to exploit their productive potential, assists economic growth, restrains illogical policy interventions and helps to insulate against shocks. This corresponds with a new World Bank study which, used data from 80 countries over four decades, confirmed that openness boosts economic growth and that the incomes of the poor rose one-for-one with overall growth.

Officially known as the Republic of Korea, South Korea is located in East Asia and constitutes the southern part of the Korean Peninsula. It was proclaimed a republic on August 15, 1948 and a rapid growth of its economy transformed it into a highly advanced economy by 1995. Today, South Korea is the eighth largest country in international trade and a regional power with among the largest defense budgets in the world. It is sometimes referred to as the “Republic of Great Han”. This paper seeks to explore the system of the country’s government, its political and socio-economic status and the implications thereof. It proposes

Trade restraints can be economical harmful or significantly beneficial to the home country, foreign country or even the global economy. Trade restraints may hinder economic growth on the international market or promote their growth whether by an increase in the global market share or GDP. As David Ricardo showed us when countries recapitulate, and trade, total world output upsurges (Murray, J. K. (1821). Ricardo believed that any country that produces for both foreign markets and in domestic markets, increases a country’s total production output (Murray, J. K. (1821). Which subsequently, increases the demand for its currency, driving the currency exchange rate up. Notwithstanding the advantages of universal trade, numerous countries put restraints on trade for different reasons. Regardless of the conjectural case that can be made with the expectation of complimentary universal trade, each nation on the planet has raised at any rate a few barriers to exchange. Exchange restrictions are normally embraced with an end goal to ensure organizations and specialists in the home economy from rivalry by outside firms. A protectionist approach is one in which a nation confines the importation of products and ventures created in outside nations.

South Korea continues a process of economic liberalisation and deregulation, but the government has yet to adopt a fully laissez-faire policy where the economy and trade are concerned. The UK TI team in South Korea works actively to lift or loosen the many regulatory barriers that still exist to ease UK-based company enter to the market(UK Trade and Investment, 2009)

This paper is not an argument against free trade. It is widely accepted that free trade should improve consumption and decrease constraints on production.

Even inside the region is possible to find examples of favorable effects of a high trade openness, the experiences of Chile (through unilateral liberalization) and Mexico (strongly benefited from NAFTA and a bigger trade with USA).

Firstly, International trade is the trading of products and ventures crosswise over worldwide outskirts. It makes the economy to make utilization of the characteristic assets for the creation of merchandise and how it 's most appropriate. It has been discussed that international trade arises when a country specializes in the production of certain goods and thus it produces more than what is needed to supply the domestic demand and therefore it exports the surplus (Collings, 1929). Also, it empowers a nation to acquire products are not produced in the economy as it may be expensive by bringing in from different nations at lower costs. Another thing is that it increases efficiency due to the international competition, each producer tries to produce the better quality goods (Collings, 1929). On the other hand, international trade may have a negative

Both the traditional free trade version and new international trade theories failed address the dynamic implication of trade opening in terms of economic development and growth of the training partners, especially so for the developing countries. Unrealistic classical and more realistic new version of trade theories failed to address the issue of economic development and growth which include, “viewing change by comparing static equilibrium states, rather than as a process occurring in historical irreversible time (Bhattacharjea

While in principle, trade liberalisation promotes long-run economic growth by the means of markets expansion for goods, human and physical capital associated with technological and managerial learning; however, it largely destabilizes Global South economies. On the one hand, proponents indicate a cause-effect relationship between trade openness and economic growth, citing Hong Kong, Singapore, South Korea and Taiwan. On the other hand, opponents challenge this stance by saying that free trade has limited success, referring to Africa and the Middle East (International Monetary Fund, 2001), (The World Bank, 2002, p. 8).

The term “NEW TRADE THEORY” describes relations among natural country returns, government actions and industry features that enable such exchanges to occur. As a result output increases with knowledge, an industry’s capacity to understand the economies of scale rises and unit cost decreases. Because of such economies of scale world demand chains only a few firms in some industries. New Trade Theory recommends that a serious issue in defining international