INTERNATIONAL TRADE

Political Economy of International Trade Policy



Political Economy of International Trade Policy

Introduction

International trade policy is a government order to maximize their own interests, to promote their rapid economic development, achieve equitable distribution of national income taken to restrict or to encourage free-trade policies. Theories of international trade and liberalization of international trade policy have long been dominated; however, this is a world in which implementation of free trade policies have not been implemented yet. Most of them are to take all the trade restrictions or protectionist policies (Ricardo 2006: 153).

The objective of the International Trade Policies is focused towards an extension of the integration between nations' economy, which means not only expanding markets, but in every sense, the expansion of economic space for the production units to make decisions of organization and location of production, the investment, the flow of resources and in cases such as the expanded European Union, free movement of citizens and labor among nationals of the signatories of an agreement.

Discussion

International Trade

International trade can be defined as the exchange of products and services that are transferred among individuals and businesses in different countries. It can also be defined as a specific transaction conducted by a multinational corporation (MNC) or international business company in business among different countries (Leontieff 1999: 339).

Political Economy of International Trade Policy

Political economy of International Trade policy can be defined as the rapidly changing social science field of study that attempts to understand the international and worldwide patterns and issues with an analytical and theoretical perspective (Gilpin 2001: 105).

Cases for free trade

Case 1: The Colombian export market

In 2008, exports in Colombia totaled to U.S. $ 37,626 million, for an annual growth of 25.5%, the result was positive, considering the adverse environment global economic in the second half, to July there was an annual growth of 37.7%. The growth of Colombia's exports exceeded as obtained by other Latin American economies such as Brazil (19.3%), Peru (13%), Mexico (3.5%) and Chile (0.2%) (Archer et al. 2010: 107).

In 2008, 52.9% of the total national exports were the main products of petroleum, coal, ferronickel, coffee and bananas. The sales of low- tech accounted for 12.3% of total exports highlighted the case of products such as clothing (pants, shirts, bras), leather, baby diapers, bedding, fabrics knitted tubes, iron, furniture of wood and rolled products of iron.

Other exports were represented by high-tech products with a share of 1.5% of the total, and those classified in other transactions with a representation of 3.5% of total exports (Ministry of Commerce Industry and Tourism, 2008). It shows that trade benefits not only an economy of the country, but it also benefits the lives and earnings of companies that export their products and services globally (Archer et al. 2010: 107).

Case 2: Russia

Russia used export taxes on oil to aid its transitional economic development after the fall of the Soviet Union. “In 1991, repressed inflation worsened, and real GDP declined to ...