Winners and Losers in the Contemporary International Trade Regime

Who are the winners and losers in the contemporary international trade regime and how do international institutions affect this distribution?

This essay will provide an analysis on the nature and consequences of winning and losing in the global trading regime, not limited to the international distribution of gains and losses from trade, but also looking at domestic distribution of wealth as a consequence from e ngaging in the traditionally neo-liberal global trading regime. Such an analysis will be done through specific cases, and will illustrate how free trade reforms impact people of different countries in different ways. This essay will also continuously examine the importance of the international institutions in not only how they facilitate and promote the contemporary international trading regime, but also in how they are distributing the gains and losses of trade, and particular attention will be put on how the structure of the World Trade Organisation and the World Bank support the current trading regime in maintaining the status quo of the neo-liberal trading regime, and how they attempt to redistribute the share of world trade, and in extension, how they a ttempt to change the distribution of wealth in the global economy.

Firstly, the theory which the current global trading regime rests upon is one of the first things that an economist learns upon entry into academia. The theory of Comparative Advantage was first introduced by Torrens in 1815, in his “an Essay on External Corn Trade” (Ruffin, 2002: 732) - but made famous through the mathematical proof by David Ricardo in 1817, in his book “On the Principles of Political Economy and Taxation”, explains and describes how all actors in an economy will benefit from specialization of production and engagement in trade – and by extension, strict theorists of neo-liberal economics, such as Milton Friedman (1997), have argued that all trade between states and nations must be unregulated and therefore

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