Conflict Theory

Conflict theory seems perhaps better suited to explain the
contradictions in world trade and, even more profound, the differences that
normally appear between developed and developing countries, especially in
World Trade Organizations Ministerial Conferences, but also in general
The tools and general trends that world trade operates with are
liberalization and protectionism (protective measures).High import taxes
and subsidies are among the most common protective measures and these have
the role of protecting national producers against lower priced, more
competitive products that may enter the country and may force the national
The industrialized countries generally aim at imposing global lower
import taxes on manufactured goods.This would ensure them better export
capabilities to third world countries, given the fact that manufactured
goods from developed countries are generally more competitive, because of
higher prices.So, the only chance for national manufactured goods from
third world countries would be a price advantage over Western goods.
However, the price advantage is driven by the price level at which
these goods are sold.The lower the import taxes, the lower the price that
Western goods will be commercialized at and, as such, the lower the price
advantage for manufactured goods n developing countries.
The agricultural products are somewhat in a different situation.
Many developing countries produce much cheaper goods, but this would tend
to suffocate national producers in United States and the European Union,
for example, because they would not be able to compete with cheaper grains,
fruits, etc.As such, developed countries use either import taxes or
export subsidies that will allow for lower price for the producers at which
they will sell and will thus protect national farmers by ensuring they stay
in business.Over these two d…

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