Economic inequality among countries continues to be a challenge for international trade in the opening of a new millennium. The developed and developing countries have experienced increases in inequality within country since 1980. The growing income gap has coincided with the period of increasing exposure of countries to globalisation through increased flows of goods, services, capital and labour across international borders. Trade liberalisation opens foreign markets, expanding the demand for domestic firms’ goods and enabling them to serve a larger market and realize gains from economies of scale. The problem of inequality has acquired greater significance across border because the gap between rich and poor states is getting more wider. The remedial programs has been implemented domestically by states to address the inequality problems within their borders which are under developed at the international level. The smaller economies of the developing countries are uniquely vulnerable in trade because of such inequalities. Despite significant liberalisation efforts the failure of some developing countries notably the LDCs to diversify production and exports and to undergo transformation has led to low growth and persistent poverty. Even after remarkable trade performances a large proportion of population in developing countries still live in extreme poverty. The international trade has exacerbated the existing problems in the distribution of resources and creates a new one such as the rich can be richer and the poor poorer. As international trade seems to serve as the corners stone of global economic social policy, than developed and developing countries must be prepare to evaluate structure and the effects of international trades in terms of its basic justice. The trade induced adjustment cost experienced by developing countries is a matter of growing concern within the multilateral negotiation and trade liberalisation. The most prominent criticism of WTO is the failure of the developed countries to implement existing commitment in areas of particular importance to developing countries’ economies.
Post Contributed by:
Miss Kaushiki Brahma
Assistant Professor of Law
Indian Institute of Legal Studies
