Wednesday, November 30, 2011

Benefits of trade liberalisation

Domestic politics has always been dominated in many countries by issues of multilateral trade liberlisation, globalisation and the WTO. Often issues are viewed in terms of domestic sovereignty vis a vis an international imposition of rules that are detrimental to the national interest. While 153 countries are members of the rule-based multi lateral organisation, often benefitting from the transparency that the WTO agreements mandate, vociferous opposition to trade liberalisation and reduction of trade barriers is witnessed across the world, across the political spectrum.

As the US is going to Presidential election in 2012, an interesting analysis of possible presidential nominees and their attitudes towards free trade is captured well in this report. Though the report rues the fact that trade related issues do not get centre stage because of other,more pressing, domestic issues, the views over time of the potential presidential candidates on trade has been analysed. Many amongst them are critiques of the WTO and trade liberalisation per se.

Often, in the political discourse across the world,  we see that contradictory positions are taken vis a vis the WTO based on what is perceived as national interest. When it is in the interest of a country's producer/manufacturer to access markets abroad, the transparent rules of the WTO and "national treatment" principle is quoted as the guiding principles to be followed by all concerned. When it comes to protecting one's own local manufacturers against foreign competition based on the same rules, fears of losing sovereignty are raised. It is obvious that a country is going to benefit from trade liberalisation as well as lose out in certain sectors. It is how one's interests are protected within the rule based system that is of crucial significance.

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