Home > International Trade > U.S. Changes Tariff Status of Some imported Goods from Developing Countries

U.S. Changes Tariff Status of Some imported Goods from Developing Countries

According to the article published June 30, 2010 in the New York Time Journal, it shows us how the United States tries to help those developing countries by allowing them exporting some product duty free.  President Obama has implemented a program to change tariff status of some goods in order to help developing countries such as Colombia Thailand and some African countries.

The program was created in 1974 and represent an opportunities for those developing countries to increase their exports and so does the trade balance. In 2009, the value of exports under the program reached $ 20.3 billion. For about 5000 types of products from 131 countries benefited from protection. Otherwise, if a country’s exports surpass a fixed value of $140 million, United States may waive this privilege.

I am not in the position of supporting Obama’s idea as president of United States which is members of G20. Because first of all increasing exports from developing countries to developed countries doesn’t necessarily mean that it will help them in some circumstance for an economic development if we look at the global economy. Second, most of developing countries don’t have a technology compared to developed countries. In my opinion, new technologies conduct a country to new industries and free trade lead to new markets.

In order to collect benefits of new technologies and a helpful market policy, those developing countries should set up a structural adjustment in their economy. The question that we can ask is how G20’ members can make trade works for developing country? My answer for this question in addition to my previous opinion is to let those developing countries to be open to the global market. Furthermore they have to cope from resistance in their own industries and workers which could not be as competitive as they should be.

After looking at those products that United States allow developing country to exports duty free, for example: frozen fruits and vegetables from Egypt and jewelry from some central African countries… in my point of view, those countries could do better if they improve their manufacturing industries in other words they have to set up a strategy  attracting Foreign Direct Investment. Instead of exporting raw material they could export many products using only one source. In this case there is an additional value to those developing countries which will help their own economy first in order to create more job opportunities and to improve their technology in order to see an economic growth.

However, such trade policy can create a losers as well as winners and from this paper I can argue that G20 help for developing countries is not enough for their economic growth.

“The value goes to where the knowledge is”

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Source: http://www.nytimes.com/2010/07/01/business/global/01trade.html?_r=1&scp=1&sq=U.S.%20Changes%20Tariff%20Status&st=cse

 

Written by: Redouane Boufous

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Categories: International Trade
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