Research Notes: Trade Integration Beneficial or Burden for Developing Countries!


The international trade enhances the economic growth through efficient allocation of resources, spurs competition, increase flow of know ledge and investment, and enhances the rate of capital accumulation in an economy; while empirical evidences suggest that barriers to trade restrain export potential are below optimal level [SantosPaulino and Thirwall (2004)]. The trade liberalization reduce barriers to the movement of goods and services among the nations and appears to be a powerful system for promotion of economic growth and development. Over the last few decades the world trade has grown on an average of over 6 per cent per year, which is twice the world output. According to Bhagwati [(1978), (1988)] and Krueger (1997), “any policy which reduces the anti-export bias will move towards liberalization of trade” and reduction the import license premium is necessary step towards trade liberalization regime [Edwards (1993)]. He also demonstrated that trade liberalization eliminates trade distortions, such as import tariffs and export subsidies.

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