TRADE &

DEVELOPMENT
INTERNATIONAL TRADE: THEORY & POLICY
ANTTO ANISHA - A015
ZAINAB HAIDERMOTA-A022
CHINMAYI DUDWADKAR- A023
AYUSHI PATEL- A030
 Introduction

• Trade can be a key factor to economic development. ​

• The important use of trade can boost a country's
development and create absolute gains for the
trading partners involved. Trade has been outed as
an important tool in the path of development.
• But perhaps it cannot be concluded that abundance
of natural resource and its efficient utilization can
only bring about a radical change. ​
• Many Asian countries are driven by policies that
progressively supported manufacturing, technology,
infrastructure and education that gradually surpassed
the growth rates and the pace of technological
advancement compared to advanced western
countries creating a dominant place in international
markets as well as enhanced the standard of living.
 International trade and development

• International trade in goods and services is important

for poverty eradication and sustainable development. ​
•  About 32% of global GDP is accounted for by global
exports of goods and services in 2011, with the share
being 28% for developed countries, and 38% for
developing countries.
•  In many developing countries and least developed
countries (LDC s), this share is much higher such as
90% in Bhutan, 136% in Cambodia, 118% in Republic
of Congo, 102% in Swaziland and 112% in Vietnam.​
• Despite the substantial contribution of trade to GDP,
some countries are more integrated into international
trade and thus derive greater benefits than others. 
US-CHINA TRADE WAR
• US Economy growth slowed down.
• Business investment froze.
• Unemployment was high, as companies
weren’t hiring more people. Trade war
cost around 300,000 jobs.
• Farmers went bankrupt.
• Manufacturing and freight transportation
sectors have hit lows.
• U.S. companies lost at least $1.7 trillion
in the price of their stocks as a result of
U.S. tariffs imposed on imports from
China.
• The tariffs forced American companies to
accept lower profit margins, cut wages
and jobs for U.S. workers, raise prices for
American consumers or companies.
• A spokesperson for the American Farm
Bureau stated that “farmers have lost the
vast majority of what was once a $24
billion market in China” as a result of
Chinese retaliatory actions.
• The two sides declared a truce in the trade
war where China agrees to purchasing an
extra $200 billion in American products
over two years above 2017 levels. 
 EFFECT ON WORLD

The increase in tariffs has

slowed down the global GDP Click icon to add picture
growth rate by around 0.7% .
The dispute has diminished
trade flows between the
United States and China.
People are not willing to
invest anywhere which in
turn leading to the drastic fall
in the global trade stock
indices.
Volatility in share prices.
 Evolution of Japan

• Japan is a major economic power in the world. During 1800’s Meiji was in
power and borders were opened for western state which previously had many
barriers.
• Modern economy was developed by introducing new technologies. Top exports
are cars ($103B), Vehicle Parts ($33.2B), integrated circuits ($30.7B),
Machinery Having Individual Function ($20B) and Passenger and cargo ships
($13.7B), exporting mostly to United States ($134B), China ($128B), South
Korea ($44.9B), Chinese Taipei ($41.6B) and Thailand ($28.9B).
• In 2019 Japan exported a total of $696B making it the number 4 exporter in the
world.
Japan’s economy has moved from manufacturing to services.
• Japan is densely populated it is the eighth most populated nation in the world.
Japan imports most of its food from other countries . They even lacks many raw
material needed for industry and energy such as oil , coal and many things.
• Japanese exports includes electronic equipment and cars.
Trade with other countries is therefore very important to Japan
Leading Technological Power

• Japan created new type of robot created in Japan.

All technological advancements that Japan has made
among time were a solution to the problems that the
country and its population were facing.
• Japan was first country to understand the true power of
technology and has embraced its benefits.
1. Fast Infrastructure
2. Workforce automation
3. Automation boosts wages and economic growth.
4. Environmental problems solved with technological
advancements.
 Relation with India
• India and Japan established a diplomatic relationship on April 28,
1952. Japan began providing a yen loan to India in 1958.
• Test of Japan’s loyalty as a friend was recognized in 1991 when
Japan was among the few countries pay India’s balance of payment
crisis. Delhi metro is one of the most successful example of
Japanese cooperation through ODA. India decided to launch the
Shinkansen program in December 2015, when Prime Minister Abe
visited India.
• Japan is the capital abundant country as if we see India is a labor
abundant country. Japan is having low relative cost of capital and
India is having high relative cost of capital. Japan produces capital-
intensive product which is steel and India produces labor- intensive
products which is cloth.
• Japan exports steel and imports cloths and India exports Cloths and
imports Steel. India import from Japan was US$10.21 Billion
during 2020 and India exports to Japan was US$4.04 Billion.
Free Trade Agreement(FTA)

FTA- pact between two or more nations to

reduce barriers to imports and exports
among them
Key Benefits
Creates economic growth opportunities
More dynamic business climate
Technology transfer and increased
integration
FDI
REGIONAL COMPREHENSIVE ECONOMIC
PARTERSHIP

• RCEP- Free trade agreement among Asia-Pacific nations

• Covers 15 countries
• Come into force in January 2022
• 91% of tariffs will be eliminated
Japan
Could lift GDP by about 2.7%
Increase employment by about 570,000 new jobs
Improve business efficiency of Japanese
companies operating internationally
MALAYSIA
Expected to increase its GDP between 0.8% and
1.7%
CAMBODIA
Boosts its GDP by 2%, exports by 7% and
investments by 23.4%
THANK YOU!