International Trade of Developing Countries

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International trade of developing countries is the classic weak vs. strong dichotomy, and underdeveloped or developing countries cannot make it solely on their own efforts; the have nots need help from the haves. Developed nations trumpet the claim that the answer to developing nations’ international trade issues is untrammeled or open market activity as opposed to government intervention by developed nations’ governments. This begs the question as to what extent the governments of developed nations are or should be responsible for supporting developing countries’ growth in international trading markets. Often the protectionist actions of developed nations’ governments to enhance their own international trading activities are the very…show more content…
Recent literature on international trade negotiation accords considerable attention to the ways in which developing countries increasingly coalesce to effect gains for themselves in negotiation, mostly with the developed world. This is both appropriate and important: from the Uruguay Round to the Doha Round, coalitions have facilitated the gains (and, at times, the losses) made by the weak against the strong. (Singh, 2006, p. 499).
Regional agreements and export-import aid by developed nations to developing nations have provided some relief through the U.S. Export-Import Bank (Ex-Im Bank), the North American Free Trade Agreement (NAFTA), the Association of Southeast Asian Nations (ASEAN), and the European Union/Common Market, among others (Carbaugh, 2013).
Import Substitution and Export-led Growth
The two key approaches by developing nations to implement their own trade policies are import substitution and export-led growth. Import substitution strategy is inward oriented: trade and industrial incentives favor the domestic market over the export market of developing nations, a strategy utilized extensively in Latin America by Argentine, Brazil, and Mexico (Carbaugh, 2013, p. 247). Advantages of this approach include:
• Risks of developing the domestic industry to replace imports are low because the market already
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