ECONOMICS It would be incorrect to assume that free trade would not be beneficial for least developed countries. This is primarily because a host of least developed countries have significant natural resources which have a sizable contribution to exports. This applies to a majority of least developed countries in Africa as well as Latin America. Additionally, owing to low level of development, a host of critical requirements such as medical equipment, medicines, capital tools and other items are met through imports from the developed and developing nations. Erecting trade barrier would make these critical imports even more expensive (Roland, 2015). A particular concern related to open trade is that domestic businesses may be impacted owing to import of foreign products. With regards to least developed countries, this is rarely the case as the products from more developing countries rarely find any robust market owing to poor purchasing power and also lack of cost competitiveness. Besides, for the protection of selective local industries, protectionist measures can be undertaken. However, these in the long run lead to inefficiencies owing to which the consumers end up paying high prices (Janvry & Sadoulet, 2015). As a result, competition from imports is preferred as it would ensure cheapest price for the consumers along with higher efficiency for producers. Erecting trade barriers and adhering to import substitution in the long run is an unsuccessful strategy as it breeds inefficiency and stops transfer of key resources from developed world such as knowledge, capital and technology (Roland, 2015).
ECONOMICS References Janvry, A.D.& Sadoulet, E. (2016)Development Economics. Theory and Practice,New York: Routledge Roland, G. (2015)Development Economics,New York: Routledge