Trade policy of developing countries and emerging economies in the course of globalization

Scientific Essay, 2012

18 Pages



1. Introduction

2. Objective:

3. Definition of developing countries in the economic sense of the word:

5. Globalization and World Economy- Purpose of the Research:

6. Distinction between emerging economies and developing countries:

7. What distinguishes the earlier trade policy of developing countries?

8. How were developing countries and their trade policy seized by globalization?

9. Outlook and Summary


1. Introduction

The current global economy is characterized by extensive globalization of the markets. The accompanying international trade affects industrial nations and developing countries in differing degrees. The analysis of trade policy in developing countries can, in the process, be analyzed using the same tools as those for developed countries, namely industrial na- tions.

Earlier development stages of trade policy amongst developing countries were character- ized by protectionism and an orientation towards a domestic market which consequently led to a weak internationalization of these countries. It was not possible to decrease the distance between the classical industrial states since the industrial states themselves, in the context of the first phase of globalization, were able to significantly advance on a global scale.

As a result of the rejection of protectionism by means of changing political structures and the accompanying liberalization, it was therefore possible, in the early phases of globaliza- tion, whose origins lie in the end of the 19th and the start of the 20th century, for several developing countries to successfully advance in the wake of the general dynamic of inter- nationalization.

The share in the world good’s market; the volumes in direct investments and the inflows of portfolio capital were able to increase amongst these groups of countries, albeit not for all countries to the same extent.

As a result, the majority of developing countries today are tightly embedded in world trade. Moreover, these countries were capable of registering export quotas1 of 20% and 30%. The gap between the so-called OECD2 countries could be largely made up for.

In the course of early globalization, the OECD countries also dynamically developed with the consequence that many developing countries were, in turn, able to benefit from these global economic interactions. Today, the export revenue of OECD countries with developing countries represents 25%. This is a 40% increase within the last 20 years.

The foreign trade of developing countries with OECD countries, on the other hand, ac- counts for merely 60% of the total foreign trade of developing countries in our present day. At the same time, there has been an emergence of foreign trade diversification in favor of exporting industrial goods by courtesy of developing countries which amounted to as much as 84% in 1996 which in 1996 accounted for as much as 84%3.

2. Objective:

In the context of this essay, the development of trade policy in developing countries in its differing phases should be illustrated and explained and particularly in comparison to the OECD countries. In doing so, the trade policy in question will be analyzed. It is preliminar- ily necessary to firstly find a definition and classification for developing countries. Fur- thermore, it is important to discover, what the future consequences of a newly orientated trade policy in developing countries can have upon the continued internationalization of markets and whether this can and should be viewed and analyzed as a predominantly iso- lated case.

3. Definition of developing countries in the economic sense of the word:

A recognized definition of developing countries and emerging economies does not exist in economic parlance. In ordinary language usage, one assumes that a developing country, in regard to its economic, social and political development, boasts a relatively low position in comparison with developed countries.

People also pinpoint such countries as ‚poor‘. This is essentially the rating for a country to be benchmarked against as a developing country. In international language use, terms like ‚third world‘ or ‚fourth world‘ are also applicable as synonyms for the characterization of a developing country.

In order to be able to classify developing countries in the economic sense, the following features are practically used as a means of measurement4.


1 Exports in per cent of the gross domestic product.

2 OECD = Organisation für wirtschaftliche Zusammenarbeit und Entwicklung, which in English means „Organisation for Economic Cooperation and Development“. It is an international organisation consisting of 34 member states who have a proven commitment to democracy and market economy. The majority of OECD member states comprise of countries with a high per capita income.

3 Bpb; Bundeszentrale für politische Bildung, Dieter Bender, Internationale Handelspolitik und wirtschaftliche Integration der Entwicklungsländer, Bonn 2002


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Trade policy of developing countries and emerging economies in the course of globalization
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Trade Policy, developing Countries, Emerging Economies, Internationale Wirtschaft, Handelspolitik, Entwicklungsländer, Schwellenländer, Weltwirtschaft, Globalisierung
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Rainer Schenk (Author), 2012, Trade policy of developing countries and emerging economies in the course of globalization, Munich, GRIN Verlag,


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