Question

Give an example of how developed countries are not bound legally to provide trade preferences for developing countries and therefore can as far as GATT/WTO procedures are concerned can be changed unilaterally by the developed countries.

Answer 1

Developed countries are always benficial from trade rather than developing countries.when trade occurs between a developed country and a developing country then a developed country can manipulate the price at their favour.but how can they do it lets discuss.

First of all the developed countries are producing highly capitalised good and export it to the developing countries where developing countries mainly produce agricultural and related goods and export it to developed countries.For capitalised good the can calculate there cost of the production.then after setting a margin of profit they set the price and lthe developing country had to import it at that particular price.more over many times developed countries dumped their backdated technologies and goods at higher price to developing countries.from that trade they always gain.developed countries had a higher influence over the WTO to set terms of trade at their favour.

On the other hand agricultural goods price are not set like the cost strategy,it is purely depends upon the market demand.as most agricultural goods are degradable so it has to export in immediately without caring about what has to be the price.and developed countries are takes advantage of that situation.also developed contries made allied organization which push the developing countries price downwards.but for developing countries there are no such organisation exist.we can take a example of that-when the coffee production is good at brazil they have to destroy a bulk amount of coffee to stable the price at world market but we can not hear anything from developed countries.