Developing countries benefit from international trade with developed countries
INTERNATIONAL TRADE
Trade has a huge role to play when we talk about globalization and exchange of economic activities between developed and developing countries (international trade). With the help of trade-offs countries have been able to get more by giving away more, despite the fact that developing countries have lesser resources both human and technical. International trade also has helped these countries settle disputes which otherwise would have been quite costly for them. They usually do not have the legal expertise or the systems to settle disputes, which again can be made possible due to the positive spillovers from international trade again contributing a whole lot more to their development needs.
The developing countries have benefitted from many tariff reductions and subsidies which have been part and parcel of indulging in international trade. An example of this could be tariff reductions that took place in the 1960s for developing countries on their manufactured goods and the fact that these reductions on imports have been higher than the tariff reductions for developed countries, makes the argument stronger by pointing towards the benefits that developed countries enjoy through international trade.
India could be said to be an example here due to the massive growth it experienced through international trade, new prospects popped up for it, changing the face of India from that of an LDC to a developing country. Today, we see how this has benefitted India by the increments in co-operatives that have taken place in food processing and packaging as originating from rural India, thereby suggesting the level of empowerment international trade has put in the hands of villages there after implementing the new economic policy. Nigeria could be another example as the liberal trade policies have seen to drive Nigerian exports and been a determinant in the macroeconomic development of the Nigerian economy, decreasing debt stock and inflation.
Conclusion
International trade is labeled to be the driver of growth for developing countries. In contemporary times, we see around us the massive growth that has re-shaped the future of many East Asian countries, which have embarked upon the journey of industrialization. Similarly, many less developed countries too have had the fortune to take advantage of unilateral trade liberalization in recent years, even though this has been much lower in magnitude to the kind of developments in developing countries. The examples of Nigerian and the Indian economy too are significant enough to point in the direction that international trade can benefit developing countries and LDCs alike.