Introduction
The topic addressed in this work, from the methodology of documentary observation and the theoretical framework related to trade agreements and international trade, is the disadvantage in terms of exchanges between developed and developing countries.
We understand that asymmetric treatment in trade agreements reflects the recognition that economies compete at a disadvantage, that is, in a less favorable circumstance or situation in which one country finds itself compared to another, and that the same discipline in compliance with the rules cannot be required from all countries participating in multilateral trade agreements.
As far as the global economy is concerned, the decline in world trade growth is both a cause and a symptom of the global economic slowdown. The prolonged slowdown in global economic growth makes generating the long-term investments needed to achieve the Sustainable Development Goals particularly difficult.
For small or developing economies, entering into trade agreements with developed countries entails a significant loss of tax revenue due to the reduction or elimination of tariffs, making economic growth impossible.
Analysis of inequality in terms of trade
The trade relationship in terms of exchange is a disadvantage for countries that are not yet developed or are in the process of development. We consider it so according to the statements of authors such as Ganem when analyzing that “unequal exchange results from the fact that although two countries may have their international trade balanced (that is, exports = imports between them), one of the countries may be exchanging a large amount of poorly paid work –generally peripheral countries– for a small amount of highly paid work –generally central countries–, which results in faster capital accumulation processes in the countries benefiting from the exchange.” (Ganem: p.2).
On the other hand, Bianco argues that “the sectors that are relatively more intensive in product innovations keep their prices at a higher level because the new products they develop require a greater amount of labor for their production, due to the more qualified labor force and the greater and more sophisticated consumption they use. These sectors are concentrated in the Center. In the Periphery, on the other hand, the sectors that are relatively intensive in process innovations are concentrated. All of this results in the downward trend of the terms of trade in the Periphery.” (Bianco: p. 29). That is to say, the most developed countries have their prices at very high levels due to the amount of qualified labor incorporated in the production process. On the other hand, in the less developed countries it is totally the opposite since they do not have sufficient innovation or investment, generating a deterioration in the terms of trade.
Chauvin Depetris, states that “Only growth with economic transformation can create a sufficient number of productive jobs, spread knowledge and technologies suitable for the development of a modern economy, improve people's living standards and promote more inclusive societies. It also means modernizing agriculture and improving technological capabilities to compete in the global market. Economic growth and structural transformation, therefore, must be seen as mutually reinforcing processes. (Chauvin Depetris:p.3).
Conclusion
When addressing our question about the inequalities faced by developing countries with the most developed ones, we understand that small economies tend to depend on foreign trade, mainly from developed countries through their exports. As they do not have sufficient innovation or investment in their economy, this does not allow them to generate a balanced trade exchange (equality in exports and imports).
Achieving economic transformation in the short term through innovation, production and technology policies will speed up development and enable competition in global markets.
Highlighted
•Bianco Carlos, “Differentiated dynamics of technical change, theory of value and deterioration of the terms of trade”. National University of Quilmes.
•Latin American Strategic Center for Geopolitics (CELAG), “The Open Roads of Latin America”
•Chauvin Depetris Nicolas, “The new economic transformation in Africa
•Economic Commission for Latin America and the Caribbean (ECLAC)
•World Trade Organization (WTO)
• Ganem Javier, “Productive structure, international trade and environment”. National University of Rosario
The author is a Customs Broker and holds a degree in International Trade from the National University of La Matanza (UNLAM)
