Can Trade Policy Help Mobilize Financial Resources
for Economic Development?
1. Background.
With the background of the violent protests of "anti-globalizers" in Seattle, Washington, Prague, Göteborg and, most recently, in Genoa, trade policy makers are no strangers to controversy. Liberal trade policies have been traditionally targeted as the primary reason for loss of domestic jobs due to foreign competition. Most recently, the critics have expanded their "arsenal" of attacks by blaming trade liberalization for poverty, income inequality, marginalization of countries in the globalized world, poor labour standards, environmental degradation and even for social instability and political turmoil, to name just a few. Proponents of liberal trade policies have been having their plate full of so many different attacks that they must wonder whether they have started a new book of "genesis".
There have been wide ranging attacks in relation to the debt burden, foreign aid and the role of multinational firms, but there has so far been relatively little informed discussion of the crucial question for developing countries concerning the linkages between trade and resource mobilization. Certainly the inter-linkages are complex, but the low-level of the debate is surprising because resource mobilization and the improved allocation of scarce resources are the keys to sustainable long-term financing of economic development which, in turn, is at the heart of poverty, lack of education, poor medical standards, spread of diseases, malnutrition, open or disguised unemployment, low incomes and even environmental degradation. More resources would help developing countries tackle social programs, poor infrastructure, and weak private sector inves ...