Developing countries and trade
International trade is an important source of foreign income in almost all developing economies, these countries are referred to as developing due to their low GDP level and they are faced with high levels of poverty and unemployment, according to David Ricardo and Adam smith international trade plays a crucial role in the development of an economy, the Mercantile theory of development states that trade led to the wealth of nation. This paper discus the various problems that the developing countries face in international trade and their effect on the agricultural, industrial and service sectors. Some of these problems are external while others are internal problem. Some external problems include competition in the global market, tariffs and other trade barriers, required quality standards. Some internal problems include high cost of production, tariffs of inputs and Problems faced by developing countries:
There are various problems that developing countries face in international trade which will be discussed; this paper also provides possible solutions to these problems of trade. Some of the problems include trade barriers, unfavorable terms of trade, high quality standards, Agricultural sector:
A large portion of GDP in developing countries depend on agriculture, agriculture helps in providing food to the population, providing employment and surplus is exported to other countries. Foreign income highly depends on agricultural products exported and also tourism, however agriculture plays an important role in these countries in providing employment and food, there are various problems that these developing countries face in this sector and they include: Trade barriers:
High tariffs are imposed on imports in international trade; tariffs are a source of revenue to the government but at the same time they restrict the level of imports in a country, the...