Discuss five reasons why developing countries are reluctant to implement free trade agreements

Discuss five reasons why developing countries are reluctant to implement free trade agreements

  • Prevents a country that relies on imports from achieving self-sufficiency in the production of goods and services. This kills local industries.
  • So as to avoid balance of payments deficits.
  • So as to effect protectionism. This controls dumping.
  • Free trade leads to creation of unemployment as consumers would prefer to buy imported goods and services, which reduces demand for local goods and services. This leads to retrenchment of workers.
  • Free trade reduces the amount of revenue the government collects.
  • Free trade does not allow young industries to grow due to competitions from foreign industries. This erodes strong industrial base.
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