Structural Adjustment Programs Saps Structural essay

Download this essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from essay:

Subsidies involve help that is given to other countries so that they can reap more profit from what they are creating and exporting, while countervailing duties work to ensure that the taxes and tariffs that are paid by these countries are not excessive so that profit can still be made. Small businesses contribute a great deal to the exports that are created in these countries but if they cannot get the financing that they need to continue to prosper then they will not be able to contribute to the overall exports of the country.

Third World development is gaining in importance today and a lot of the multilateral trade negotiations which are taking place are changing prospects for many of these countries. It is, therefore, important to look at trade negotiations and what they will cause as they relate to the subsidies and countervailing duties for these countries. For purposes of this section, the United States and Canada, and any subsidies that they give, will not be examined. Instead, the focus will remain on countries that are in the Third World and/or that are just developing.

The growth of Third World countries remains very important because they will affect other countries and therefore it is important to understand the trade negotiations that are taking place within them. Many people do not understand these multilateral trade negotiations, especially where the Third World is concerned. Much of this has to do with how much emphasis is generally placed on North American issues. When too much emphasis is placed on issues in North America, not enough is learned about the rest of the world. Even though issues in North America are clearly important, the Third World must be addressed. In order to understand what is going on throughout the world when it comes to law on an international level, the Third World countries and the trade negotiations that are taking place within them must be addressed and understood.

When looking at subsidies and countervailing duties, the most important things to consider are trade agreements and negotiations. These trade agreements and negotiations will be the main issue that will be addressed here because understanding how they are harming the Third World countries and how this harm could continue well into the future is very important. Even though these Third World countries often need beneficial or extra treatment in order to boost their economic abilities and help their growth, North American countries must also be treated fairly where these agreements are concerned.

Finding a balance between these two things is often difficult and the fact remains that North American countries have much more power when it comes to trade agreements than Third World countries do. Changing this and making it more fair and balanced for everyone will not be something that can be done easily. However, with more understanding regarding the Third World countries, there is a much higher chance that agreements can eventually be reached that will benefit all countries involved and that will be deemed fair by all countries involved. Whether this can actually be accomplished is something that only the future can determine but it is something that these countries can work toward.

Much of the information that needs to be addressed where subsidies and countervailing duties are concerned deals with multilateral trade negotiations. Generally, these are designed to help these Third World countries develop faster economically and have changed a lot of the structure of international investment and trade in the process (Diaz-Alejandro & Helleiner, 1987). In 1995, the World Trade Organization was established and implemented. It was designed to phase in different things for different areas during certain periods of time as part of an agreement reached in the Uruguay Round of trade negotiations (Ho, 1998). This was the eighth trade negotiation that was held under a general agreement on tariffs and trade within the last 50 years (Ho, 1998). Every time that one of these negotiations was held the investment environment and the international trade abilities for developing countries in the Third World were changed in some way.

Because globalization and technology are moving so quickly, and because many parts in the Third World are still very underdeveloped, it is important to look at the environment for investment and trade in the Third World and look at what kind of prospects for the future are seen in the Third World countries. This has a lot of significance, not only for those countries in the Third World, but also for other countries that might have interest in trading with them. If the trades that these countries are able to make with other countries are not acceptable and agreements cannot be reached then the countries that have the goods and the countries that want the goods will both suffer.

Even though it might be oversimplifying the issue a bit, many of the different rounds of trade negotiations can be looked at as being a story of how much autonomy and freedom have changed in Third World countries as they pursue policies that help them develop as nations (Ho, 1998). There are both the new areas and traditional areas where these changes take place (Baughman, Mirus, Morkre, & Spinanger, 1997). In many of the more traditional areas there have been many fights for treatment that Third World countries called special and differential (Ho, 1998). The main focus for many of these trade negotiations has been reducing tariffs in many countries as well as dealing with reciprocal trade agreements and most-favored-nation status (Ho, 1998).

Having special and differential treatment relates not only to autonomy but reciprocation in tariff bargaining as well (Ho, 1998). It also relates to privileges that are expected where exporting is concerned and the autonomy to be able to create and deploy various subsidies (Ho, 1998). Many of these treatments have all but disappeared from the Third World countries and this is making their continued growth very difficult (Choate & Linger, 1988). Many of the North American countries argue very strongly against allowing any type of special and differential treatment for Third World countries and this harms them in specific areas.

The first area where this is a problem deals with industrial products that were imported to countries that were just developing (Ho, 1998). Many of these have tariffs on them but the number of goods that have tariffs went from 22% to 72% (Ho, 1998). This gives a chance to negotiate these tariffs more in future trade negotiations but is difficult for the Third World countries now. The second problem is that the restrictions on specific subsidies were made much tighter and some of the subsidies were prohibited altogether (Ho, 1998).

Even the subsidies that were not prohibited were restricted in many ways (Ho, 1998). When subsidies are restricted there are grace periods that are often granted between countries that are developing and countries that have not yet begun to develop (Ho, 1998). The idea is having a somewhat graduated scale so that all countries can catch up. Even though this is the idea, however, it is not necessarily working in the way that these countries wish it would.

Not all of the problems with the trade agreements were traditional. Some of the new problems deal with investments, intellectual property rights, and autonomy for Third World countries that wanted to pursue policies that would help them develop (Ho, 1998). A lot of these policies were curtailed in many different ways and future negotiations are likely to restrict them more (Ho, 1998). All members of the World Trade Organization must provide patent, copyrights, and trademark protection for certain numbers of years on all services are goods that are covered under any agreement that North American countries follow (Ho, 1998).

This does not seem like a strong burden until one considers the fact that judicial procedures have to be created in order to enforce this type of agreement and this places a large burden on many countries that are still developing their judicial systems and ideas of what is appropriate for their countries (Ho, 1998). Even when countries work together to trade goods and services some countries progress faster than others. Any type of economic analysis will indicate this. Many people that analyze trade have basically ignored how uneven the development and growth is between nations that trade with one another (Ho, 1998).

This unevenness is especially obvious between North American countries and countries in the Third World but this problem was not even addressed until the 1950s (Bhagwati, 1987; Agosin, Tussie, & Crespi, 1995). Many different models for trade between North America and the Third World countries have been created since more attention was placed on this in the 1950s and these include things like some of the declining terms where trade is concerned for many of the exporting companies, how much dominance North American capital actually has, and the lack of technology for use in business and innovation in…[continue]

Cite This Essay:

"Structural Adjustment Programs Saps Structural" (2009, February 10) Retrieved October 24, 2016, from

"Structural Adjustment Programs Saps Structural" 10 February 2009. Web.24 October. 2016. <>

"Structural Adjustment Programs Saps Structural", 10 February 2009, Accessed.24 October. 2016,

Other Documents Pertaining To This Topic

  • Structural Adjustment Policies Structural Adjustment s

    2005). A study by the Center for Economic and Policy Research reported that "77% of countries [that had received loans from the WB-IMF) for which data is available saw their per capital rate of growth fall significantly during the period 1980-2000." And by the late 1990s, the article continued, the IMF could no longer "pretend that structural adjustment had not been a massive disaster in Africa, Latin America and

  • African Development Structural Adjustment Policies

    (Shah, 2010) F. Impact of Structural Adjustment Policy Preconditions According to Shah the preconditions impact poorer countries in a devastating manner and it is reported that the following factors result in "further misery for the developing nations" and ultimately keep these countries dependent on nations that are developed: (1) Poor countries must export more in order to raise enough money to pay off their debts in a timely manner; (2) Because

  • Privatization Appropriateness of the Presentations in Evaluating

    Privatization Appropriateness of the Presentations In evaluating the two research papers presented for this assignment, it will involve determining the appropriateness of the papers, the literature review presented in the papers, the methods employed, the quality of the data analysis, along with readability, relevance and the contribution each paper makes towards the question at hand: is privatization the best solution in Nigeria? Owolabi Bakre from the Brunel Business School in the UK argues

  • Rapid Innovations in Technology Particularly Telecommunications...

    Rapid innovations in technology, particularly telecommunications and transportation, have accelerated the globalization process in recent years, and a number of positive outcomes have been associated with these trends, including increased levels of international commerce and improved cross-cultural understanding and communications. Despite these significant positive outcomes, the same globalization processes have also further exacerbated existing economic and political inequalities between developed nations such as the United States and the United Kingdom.

  • Marketing and Economics Agricultural

    Origins, History of the IMF The International Monetary Fund was first conceived between July 1-22, 1944, at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. The conference was attended by representatives of 45 nations, which were called together in order to plan and lay the groundwork for a cooperative economic framework to solve global financial crises before they occur. One key reason for the conference was to

  • Domestic and External Factors on African Macroeconomic

    Domestic and External Factors on African Macroeconomic Formulation Domestic and External Factors on African Macroeconomic Formulation Growth, productivity and employment are the most common economic variables to reduce extreme poverty and break poverty trap. Report from World Bank in 2007 revealed that one percent in GDP growth results to 1.3% poverty decline in low-income countries. Moreover, development in the productive capacity leads to reduction in sustainable poverty. With improvement in the economic growth,

  • Ghana Many of the Most

    According to (Mishkin & Schmidt-Hebbel, 2007) this tool is so popular because it has a proven track record of creating macroeconomic stability. The authors explain that this stability is present because it promotes price stability. The authors further explain that even "though the contribution of it to lowering inflation is still a matter of debate, empirical research suggests that it has significantly contributed to lowering inflation and its volatility, especially

Read Full Essay
Copyright 2016 . All Rights Reserved