Free Trade Africa Essay

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Pages: 13

Money and Banking FREE TRADE IS IT PROFITABLE TO AFRICA? By Issam Lahjouji

Free trade is a major challenge for all countries in the world. This concept is not entirely new because no country can be self-­‐sufficient, in isolation. Trade liberalization appears for various reasons, namely the unequal endowment in natural resources, the necessary international division of labor, the comparison of production costs.

With globalization, products are consumed in the same way everywhere. It operates at the same time a profound change that occurs in all sectors. Now everything is commodified, it both at the production and the circulation and distribution of goods and services. African countries like other developed countries have an interest to participate in international trade. But this integration requires active participation in policy-­‐making and negotiations within the institutions.

Unfortunately, most African countries play a marginal role in these institutions, even when critical aspects of their development are in. This marginalization of African countries in these institutions reflects their low economic weight internationally. Indeed, despite the many efforts of African leaders after independence and the opportunities offered by globalization, Africa has not been able to take out of the game. The end of colonialism had released new energy and leadership were resolved that their countries are catching the developed world. Thus all sectors of the economy experienced a revolution.

However, despite progress, Africa addresses the 21th century in the category of least developed countries. It is the only continent where poverty is on the rise, more than 200 million poor people. And what it represents 10% of the world's population, Africa generates only 1.5% of world trade.

Given this fact, one wonders if Africa is the wrong way? Free trade is it beneficial to Africa?

INTRODUCTION

LAHJOUJI Issam

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A-­‐ History Until the early eighteenth century mercantilism was the doctrine of international trade. The principle was the need to minimize imports and maximize exports. All this in order to focus on the country's most precious metals that were considered at the base of the national wealth. David Ricardo (1772 -­‐ 1823) is the true theoretician of free trade with the theory of "comparative advantage." He argues that trade enriches both…