International trade Essay Example | Topics and Well Written Essays - 2500 words

International distribute - Essay ExampleIn essence, Chinas strategy of protecting the domestic agricultural sphere can be seen as an attempt to restrict the importation of agricultural goods from other countries. Different frugal models used to analyze the Chinese agricultural domain such as GTAP do not choose any reliable information on the effects of high tariff rates on the Chinese economy. However, several studies rescue shown that the WTO admittanceion would defecate positive effects on the Chinese economy. Many economists harbour asserted that the removal of tariffs and subsidies will have an impact in the production and trade of agricultural goods in the dry land. Further, several studies on the Chinese agricultural sector show that the countrys agricultural policies have made agricultural producers spend more time in the production of more valuable crops such as wheat, corn and oil seeds as opposed to crops such as fruits and vegetables. It is evident that these pol icies are aimed at making China self sufficient in the production of wheat, corn and oil seeds. However, several economists have suggested that these policies are extremely expensive to the economy since the prices of most Chinese agricultural products are above the prices in the international foodstuff. The policies put in place by the government hinder resources from benefiting some of the most potent sectors of the economy such as agriculture. International Trade Background Information The common accord, instituted in 1978, that was aimed at opening up the Chinese economy was a substantive factor in invigorating the countrys economic harvest. Faster economic success is normally followed by a relative slack in the agricultural sector. However, in China, this was initially affected by the implementation of the agricultural domestic obligation system. This system contributed to the substitution of collective agricultural holdings with individually administrated holdings. Later , there was the introduction of less taxation in the agricultural sector, an initiative that was followed by most developed countries in their early years of development (Snape 1991, p. 67). Developments in the agricultural sector grew faster in a similar manner as the other sector of the economy such as industries from 1979 to 1984. However, the benefits of moving to the household responsibility system and the increment of relative prices for do work products were realized later, in the mid 1980s. After the 1980s, agriculture did not experience any significant growth like the service and industrial sectors. The industrial sector experienced faster growth on the eastern seaboard. In addition, trade in the rural townships boomed, which led to rising employment rates. In as much as there was the decline in agricultures contribution in the countrys GDP, and employment in the 1980s, there was a subsequent increase in the contribution to GDP in 1990s (World Bank 2005, p. 34). Introduc tion China is currently a signatory to WTO according to Pigott (2002). This enables the country to replication an active part in new rounds of bilateral trade discussions. The country can, for example, demand improved market penetration for its agricultural exports and other products in the global market. If WTO membership improves Chinas chances of increasing its access to agricultural products more than other markets in the global market in the future, that would be a significant benefit for China