Imports from the global South are thought to increase inequality in developed countries
Sample Solution
Imports, Exports, and Inequality: A Brief Analysis
1. Inequality and Imports: Developed countries' imports, particularly from the global South with lower wages, can depress domestic wages in specific sectors, potentially exacerbating inequality for low-skilled workers (Alderson & Nielsen, 2002).
2. Inequality and Exports: Less-developed countries' exports to the global North can create unequal power dynamics, leading to exploitative labor practices and unequal profit distribution, widening the income gap within exporting countries (Mahutga & Jorgenson, 2016).
Choosing a Focus:
EU Integration and Less-Developed Countries: I'll delve into the impact of EU integration on exports and inequality in less-developed countries.
Strategies for Change:
- Fair Trade Agreements: Implementing fair trade agreements with stricter labor standards and minimum wage requirements can ensure more equitable distribution of export profits in developing nations (Mahutga & Jorgenson, 2016).
- Investment in Local Processing: Encouraging investment in local processing industries within exporting countries can add value to raw materials, create skilled jobs, and boost local economies, reducing dependence on low-value exports (World Bank, 2018).
- Focus on Sustainable Development: Integrating sustainable development goals into trade agreements can promote environmental and social responsibility, improving working conditions and empowering communities in exporting countries (European Commission, 2021).
Full Answer Section
Evidence:
- Studies by the International Labour Organization (ILO) show that fair trade agreements have led to higher wages and improved working conditions for farmers and workers in developing countries (ILO, 2023).
- Research by the World Bank indicates that investing in local processing industries in Africa has increased export value and created jobs, contributing to economic growth and poverty reduction (World Bank, 2018).
- The European Commission's "Trade for All" strategy emphasizes the integration of sustainability goals into trade agreements, aiming to promote inclusive and equitable development in partner countries (European Commission, 2021).
By adopting these strategies and fostering responsible trade practices, EU integration can contribute to reducing inequality in less-developed countries while maintaining mutually beneficial trade relationships.