Resource Library

Trade Liberalization, Industrialization and Development

The Experience of Recent Decades

Author : Shafaeddin, M.

Publisher: Third World Network

Place of Publish: Malaysia, Penang

Year: 2011

Page Numbers: 42

Series: TWN Trade & Development Series 40

Acc. No: 4623

Class No: 382.3 SHA

Category: Books & Reports

Subjects: Trade

Type of Resource: Monograph

Languages: English

ISBN: 978-967-5412-49-3

“In this paper, the author analyzes the experience of countries in trade liberalisation in the light of the debate between neoliberals and neo-developmentalists. The latter regard selective and gradual trade liberalisation as necessary at a certain level of development as necessary at a certain level of development and industrialisation. The former group advocates universal, across-the-board and rapid liberalisation by developing countries, irrespective of the level of development and industrialisation of the country concerned. The historical evidence from the early industrialisation period, the author finds, does not support the claims of the advocates of universal and across-the-board free trade. More recent experience from the last quarter-century also bears this out, with developing countries which had undertaken full-blown trade liberalisation facing de-industrialisation or becoming locked in low-value-added manufacturing based on natural resources and assembly operations. The paper also specifically compares the recent performance of China and Mexico, two economies which share similarities but which have followed different approaches to trade liberalisation and industrialisation. Mexico has been following policies recommended by the neoliberals, while the Chinese government has pursued an experimental and developmentalist approach, implementing policies for building the capabilities of domestic firms while also gradually liberalizing international trade. Their contrasting experiences, it is argues, point to developing countries' need for a dynamic and flexible trade policy that not only eschews premature liberalisation but also operates in tandem with a development-oriented industrial policy.”Reference: Trade Liberalisation, Industrialisation and Development: The Experience of Recent Decades by Mehdi Shafaeddin