Type: Economics
Pages: 2 | Words: 346
Reading Time: 2 Minutes

This is the lifting, removal, or reduction of trade activities and practices that frustrate the free movement of goods and services from one country to another. It involves breaking of barriers such as licensing policy quotas, and arbitrary principles as well as limiting tariffs that include duties, surcharges, and export subsidies (Tujan 2006).

The growth and development of world economies over the years have been dependent on easier and faster trade between industrial and agricultural nations. This easier exchange of goods and services helps developing countries grow and develop their GDP faster and at the same time reduce the severe poverty levels (Cook 2010). One major contributor to the development of several multilateral trade liberalizations is the General Agreement on Tariff and Trade (GATT) which helped reduce most international trade barriers related to tariffs and further led to the formation of the World Trade Organization (WTO) whose main obligation was to integrate the multilateral trade accords (Porges et al 1995).

Opening of economies and lowering of tariffs has brought about competitive benefits in developing countries in some manufactured goods and this finally leads to the reduction of the amount of grants they currently receive from the developed nations. (James 2001). Based on these, there is still a serious need to liberalize the international trade even further to areas by reducing or completely lifting all the tariffs like the tariff peaks and tariff escalation on agricultural products and labour intensive industrial developed products, sectors where developing nations have a competitive advantage.

To further improve international trade liberalizations, fresh negotiations should be started by WTO and International Monetary Fund (IMF) because such talks help provide an opportunity for nations to expand noticeable benefits for their exporters and to achieve the goal of market globalization that benefits all countries (Sharer & Sorsa 1998). This also assists developing countries to unlock their own markets and prevailing over resistance from the deep-rooted interests that gain from protection and to have equal playing ground in the international trade which will eventually lead to increased efficiency, lower cost of consumption and promote economic growth and development.

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