Tuesday, November 11, 2014

Trade Regimes

Are world trade regimes based more on dominance or reciprocity? I think that both of them has equal status to the world. Although both of them has disadvantage, the dominance trade showed in the documentary "Black Gold". The citizens in Ethiopia produce coffee beans, and it is their major income. The amount they earn on coffee beans decide on the way they live their life. In the video all of them live poorly and children do not go to school. From that we can know that the deal on coffee beans are not good to them. The problem is that their coffee beans was sold in a cheap prize and the "middleman" sells them in a high prize in other countries. The citizens have to agree to the deal because they need to compete with other coffee beans farms. I found that dominance trade apply most on agriculture product. Most agriculture export countries are LEDCs, they can never live a better life because what they earn is so little. At the end of the documentary, some of the coffee farmers change their product into some types of herb that is consider drugs. They said that they are force to change their product because that is what they can earn the most from. Reciprocity trade is one of the better kinds, but it only works when two countries has positive relationships. The European countries, they all work together and they all share the same tariffs on import. The Reciprocity trade is more of a better kind which will help the developing countries develop. Like Taiwan and the USA, USA lower tariffs on imports, so that Taiwan are allow to develop well. All the main reason is to keep Taiwan from going to communism during the Cold War. Overall I think that dominance trade is the most common but not necessarily more than reciprocity. Both trade regimes plays important rules to the society and both has disadvantage that needs to be change.

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