• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Effects of Liberalization

Extracts from this document...

Introduction

Gillian Ong Economics HL February 7th 2009 Critically assess the arguments for and against the increases liberalization of International Trade. Refer in your answer to both less and more developed countries. Liberalization within international trade would be defined as the removal of trade practices that put limits onto free trade. This would include Tariffs and Non-tariff Barriers. There are two types of protectionism. The first one is Tariffs, Tariffs are a tax that is placed on goods as they move within trade, and these include duties, surcharges and subsidies. The other type of protectionism is Non-tariff Barriers, these are trade barriers that restrict imports, but aren't the same as normal tariffs, and these including regulations, quotas, and arbitrary standards. A trading bloc is an agreement internally by the government of a regional system, whereby tariffs and non-tariff barriers are reduced or eliminated. This is significant with regard to liberalization, as liberalization removes the tariffs and non-tariff barriers, while a trading bloc is the agreement within the government that organizes the removal of these trade barriers. ...read more.

Middle

Protectionism is needed in Infant Industries, as these industries take place in less developed countries, and don't have the economies of scale advantages that the more developed industries have. However less developed countries, or countries with Infant Industries, are usually very inefficient, are unlikely to develop quickly. The impact of liberalization on Infant Industries is that it won't benefit countries with emerging economies China and India, but it will benefit countries with developed industries like Europe and the USA. Another reason that Import Substitution is unsuccessful could be that the benefits of Import Substitution go to foreign firms, because foreign firms are able to use taxes and subsidies to their advantage, as well as placing their industries behind the tariffs. So Import Substitution won't benefit LECD's but the MEDC's will benefit. Employment is a key factor that is affected when liberalization occurs. When companies outsource, and there is liberalization, firms will choose to move to cheaper places, in turn hiring workers at cheaper areas e.g. ...read more.

Conclusion

is the measurement of the payments between one country and the other countries that that specific country trades with. It is the total of all transactions, and is determined by the countries exports and imports of all goods and services as well as financial capital and transfers. So we can see that as liberalization takes place, the exports and imports have no more trade barriers placed on them, therefore supply will increase, and the balance of payments within two countries trading will increase as the imports and exports will increase respectively. Liberalization also causes many social and cultural consequences as countries are characterized by what they sell. For countries in Asia, they produce rice, tea etc. For countries like South America, they specialize in coffee, cocoa etc. Liberalization causes a bigger export rate for these specific products to other countries, also increasing diversity within each country, therefore causing a positive effect socially. However, if a country exports many of their 'signature' goods, then the cultural aspect of their country is less enhanced, as when liberalization occurs, now many countries will be able to have that same product, and the producers lose cultural aspects. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Economics HL - IA

    Consumers will therefore look for lower prices, and hence start importing goods from Denmark. On the graph, imports are shown by the difference between Q1 and Q2. Again the total surplus will increase, but this time producers will be worse off.

  2. The Lightbulb and its Effects on Society

    The light bulb stands out in a way for its technological advancement. The incandescent light bulb was the sole artificial light source that could be controlled from one power generator. This could not be done with gaslights, and the light that gaslights offered was no as bright as the light offered by incandescent light bulbs.

  1. The structure of the EU budget and its allocation

    The actual amount finally declared for the third quarter was even lower than the September Member States' revised forecasts and, moreover, for part of the claims received from several Members States, it was not possible to make any reimbursement because the commitment appropriations of the year were already exhausted.

  2. Fair Trade

    Life expectancy at birth 2006 73.9 years Adult literacy 91.5% Gross enrollment ratio in education 71.5 GDP per capita PPP US$12,536 From the HDI it is evident that Malaysia's state of development is relatively high in comparison to other Asian nations in the region.

  1. GPD countries

    Furthermore, GDP is usually measured in nominal value at market exchange rates or at purchasing power parity (PPP) rates. PPPs are currency conversion rates that take into account the differencies in price levels between countries. The more appropriate tool to compare GDP between countries is comparing at PPP rates, because

  2. What is the impact of the Notional Interest Tax Deduction system on investments in ...

    We can see that India has 'grown at 9.2% in 2007' 3 During the same period in time China has grown at 11.9% in 2007 4, which meant 'that China in 2007 stood as the second-largest economy in the world after the US.'

  1. What has happened to Canada's demographic over the past 50 years? What are ...

    ________________ OLDER PEOPLE IN THE WORKPLACE Describe some myths that are related to older employees who are in the workplace. Myth 1 ________________ Myth: Older workers can?t learn as efficiently as younger workers Fact: According to a recent Harvard study, the ability to use an accumulated body of knowledge keeps rising throughout the lifetime of a person, rather than declining.

  2. 15 Historical Economic Questions on Mercatilism and the Development of European Countries.

    Hoover aimed to ensure that domestic wages would not fall. In order to ensure such a thing, one would need to create artificially high prices, which couldn?t be possible with the public?s current financial situation. This led to the introduction of a new piece of legislature which aimed to do just so.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work