Critical Analysis: Reforming the Current State of International Trade

This essay examines the current state of international trade, highlighting the need for significant reforms to enhance the benefits for participating nations. It discusses how multilateral trading systems are increasingly concerning governments due to rising operational costs and governmental intervention. The essay notes the disparity between the export materials of wealthy and poor countries, with high-income countries exporting premium products while lower-income countries primarily export raw materials. It emphasizes that inflation is a crucial indicator of healthy global trade, but increased governmental intervention and a lack of reforms have hindered growth potential. The essay uses the European trade system as an example of these problems, while also pointing to countries like Japan, Spain, and Italy, which have initiated reforms such as expansionary monetary policies and national debt reduction. The essay concludes that while some reforms have begun, further reductions in bureaucracy are needed to encourage more sellers to participate in international trade. Desklib provides access to similar essays and resources for students.

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ECONOMICS ASSIGNMENT

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Contents
The current state of international trade......................................................................................3
Reference....................................................................................................................................5

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The current state of international trade
The current platform of international trade in different parts of the world requires huge
reform in order to increase the gains of the participants. Stark (2010) stated that multilateral
trading systems are becoming an increasing concern for the government. It is not only
increasing the cost of operation but also increasing the intervention of the government. The
governance and the control in terms of trade in different parts of the world have also reduced
the overall output as well.
The current trade in international trade has also shown that there has been a significant
difference between the export materials of a poor and a rich country. The income level of the
domestic consumer is one of the measures that differentiate among the countries. Therefore,
the high-income countries export more premium products compared to the lower income
counterpart who mainly export raw materials such as wage workers in different parts of the
world. Capling & Higgott (2009) noted that assessment of the goods that are being exported
out of the country can be a good study to understand the state of the economy and the current
account deficit of the country.
The article was chosen for the study of the paper also states that inflation is one of the
important measures of healthy global trade. The global inflation has been falling since the last
decade. Bishop, Reinke & Adams (2011) noted that inflation increases due to the increases in
the transaction in the economy. Increased intervention from the side of the government and
the lack of reforms in the multilateral global trade has reduced the growth potential of the
participating nations. Although the government in many parts of the world is trying to reduce
the interest rate in order to provide a boost to the trade processes it has hardly made any
impact. The credit growth of the overall global economy has fallen and the public debt of
different government has increased significantly. One of the best examples for the

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problematic state of global trade is the European trade. Due to the red tape of different
government trade has been hampered over the years in Europe.
However, reforms can be seen in different government policies in recent times. For example,
Japan one of the first countries to reduce the intervention of the government in different
stages of international trade. Japan, for example, has come up with an expansionary monetary
policy to increase the demand for the goods and the services at the aggregate level. Apart
from that, countries like Spain and Italy has also started reducing the national debt of the
country which can further increase the transaction within the economy and hence the global
trade will increase. Weiss (2010) stated that government should intervene in where it is
needed and should reduce the bureaucracy in the global trade so that more and more seller
becomes interested in exporting their products in other parts of the world. Therefore, as per
the current status of international trade it requires some reforms which have started in some
parts of the world.

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Reference
Bishop, T., Reinke, J., & Adams, T. (2011). Globalization: Trends and perspectives. Journal
of International Business Research, 10(1), 117-130
Capling, A., & Higgott, R. (2009). Introduction: The future of the multilateral trade system-
what role for the world trade organization? Global Governance, 15(3), 313-325
Stark, J. (2010), Is the global economy headed for a lost decade? A European Perspective.
Business Economics, 45(3), 147-151
Weiss, J. (2010). Changing Trade Structure and its Implications for Growth. World
Economy, 33(10), 1269-1279.