Economics student at Universidad EAFIT, Colombia
According to the
European Commission (2010) in the past few years, global trade has expanded rapidly.
From the late 1990s until now, the value of world merchandise trade grew by 73%.
This growth has been mainly driven by growth in incomes and demand, falling in
transport and communication costs, significant increases in foreign direct
investment (FDI) in emerging market economies, improvements in efficient economic
policies along with the implementation of trade policies and reductions in
tariff and non-tariff barriers without ignoring the increasing competitive
pressures that drive the search and pace of innovation and the implementation
of costcutting, outsourcing and economies of scale in many industries.
In this context, although
it is difficult to make general statements about the impact of trade opening and
its growth per se; trade should not be considered in isolation from national,
international and global realities. In this sense, one can establish that “trade growth is not pursued for its own
sake”[1];
it brings along a triple major benefit for the ongoing country: more economic
growth; greater consumer welfare translated into higher incomes and lower
prices of goods and increased in employment conditions – greater and better-paid
jobs-.
As a matter of fact, U.S
is the world's largest economy and the largest exporter and importer of goods
and services nowadays, which implies an active and relevant role of trade as
an important engine for its economic growth and employment market -considering
that more than 30 percent of U.S. GDP is tied to international trade and
investment, and more than one in five U.S. jobs are supported by trade
according to the Trade Benefits America Coalition (2013)-. This is the reason
why U.S. engagement in the international marketplace today, is more important
to this nation’s economy than ever before, exhibiting and showing the key role
that trade plays in the economic current situation of countries worldwide.
Moreover, trade
openness stands as an important lever that lift developing countries out of
poverty allowing them to reap and reproduce the benefits of globalization into
their own economies, taking into account the strong increase in the share of this
economies in the international trade flow . This rapid economic rise and
increasing involvement in global trade of these emerging market economies -especially
major performers such as the BRIC members- has made enormous contributions to
growth, development and prosperity within these economies. As part of a
comprehensive set of policies and internal circumstances, it has helped to lift
millions out of poverty and spread the benefits of higher living standards
through lower living costs. It has brought nations closer together, fostering
mutual understanding and promoting world peace while equipping the involved
countries with the necessary tools to meet the challenges carried along with
the hazard of this economic activity; challenges towards jobless growth
management, high unemployment, poverty, unequal distribution and allocation of
resources, environment and sustainable development, and the role of trade routes
as well as investment decisions in this context.
For all the above, and considering today’s
climate of “weak economic recovery, high
unemployment and pressure on public finances”[2],
one of the effective solutions that governments might adopt to boost growth and
employment could be to foster global trade thus keeping global markets open;
which provides two important implications; a result and a challenge for the involved
country. The result: better economic performance -trade and market openness
becomes a more prevailing tool for generating better quality jobs and boosting the
much-needed growth-; the challenge: to construct coherent national and
international policy frameworks that seek and drive towards inclusive growth of
trade among countries because “it is their
design, not their absence, that makes the difference”[3].
References
European
Commission. (2010). Trade as a driver of prosperity. Recuperado el 20 de 09 de 2013, de http://trade.ec.europa.eu/doclib/docs/2010/november/tradoc_146940.pdf
OECD Trade and
Agriculture Directorate (TAD). (Mayo de 2012). Better policies for better
lives. Recuperado el 17 de Septiembre
de 2013, de http://www.oecd.org/tad/tradedev/50447052.pdf
Trade benefits
America Coalition. (2013). Trade benefits America|. Recuperado el 20 de 09 de 2013, de
http://tradebenefitsamerica.org/contact
World Trade
Organization (WTO). (2013). The Future of Trade: The Challenges of
Convergence. Report of the Panel on Defining the Future of Trade.
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