Developing Countries in the World Trading System
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Developing Countries in the World Trading System

The Uruguay Round and Beyond

Edited by Ramesh Adhikari and Prema-chandra Athukorala

The book examines the achievements of the Uruguay Round of trade negotiations in reforming the world trading system and the challenges to future reforms. It begins with an overview of the genesis of the world trading system and moves on to examine the key issues as they relate to developing countries. These include further liberalization of agricultural trade; abolition of the Multifibre Arrangement; environmental and labour standards; competition policy; regional integration in South East Asia; and the implications for developing Asian countries of the liberalization of the Chinese economy and its WTO membership. Furthermore, the book discusses the links between trade liberalization and poverty reduction – drawing on the experience of Asian countries – and puts forward arguments on how trade liberalization could effect a greater reduction in poverty.
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Chapter 10: Trade policy reforms, growth and poverty reduction

Ramesh Adhikari


* Ramesh Adhikari One of the remarkable occurrences in the history of economic development over the last five decades is the success of East and Southeast Asia in achieving faster growth and poverty reduction than that achieved by other developing countries (ADB 2000; Collier, Dollar and Stern 2000; OECD 1999). In the early 1990s a World Bank (1993) research report categorized them as high-performing Asian economies. The report indicated that many factors were responsible for their success, but the most important was the economies’ greater openness or outward orientation of their trade policy, coupled with macroeconomic stability and the development of human and physical capital. In general, these economies have grown significantly faster than other developing economies and sustained that growth over time. The faster growth has been associated with reductions in poverty and a more equitable distribution of the gains resulting from the rapid growth. Their core labour standards have improved, and they have been able to take much greater advantage of their labour forces. In addition, they have achieved high literacy rates. Some of these successful economies have experienced rapid convergence in their income levels to that of the industrial countries, thereby leaving the closed economies even further behind (Dollar and Kraay 2000). However, ADB (2000) reports that in most Southeast Asian economies, such as Hong Kong, the Philippines, Malaysia, Singapore and Thailand, while high and steady economic growth reduced poverty, this growth was not associated with improvements in income inequality, as Gini coefficients remained high at 0.41 to...

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