10^th Global Food Security Food Safety and Sustainability

Trade Liberalization

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Trade Liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between nations. This includes the removal or reduction of both tariff  and non-tariff obstacles (like licensing rules, quotas and other requirements). The easing or eradication of these restrictions is often referred to as promoting "free trade." Policies for liberalization in trade that make an economy open to trade and investment with the rest of the world are needed for sustained economic growth. The evidence on this is clear. No country in recent decades has achieved economic success, in terms of substantial increases in living standards for its people, without being open to the rest of the world. In contrast, trade opening (along with opening to foreign direct investment) has been an important element in the economic success of East Asia, where the average import tariff has fallen from 30 percent to 10 percent over the past 20 years.The best approach would be to identify the major sources of income of the poor and ask how liberalization would impact these sources. For a large chunk of the poor population, the principal source of income is labour, and the question is how liberalization will impact the real wage. Some of the poor may own small amounts of land, and thus earn a part of their income from producing and selling agricultural products. In this case, how the profitability of what they produce is impacted must be taken into account.