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Following the lead of Latin American countries such as Mexico and Chile, Peru signed a Free Trade Agreement (FTA) with the United States in December 2005. While most economic analysis points towards overall benefits for Peru, there are concerns regarding potential adverse consequences. In order to derive maximum benefits with minimum losses, it is vital to identify appropriate mechanisms to support short-term losers – especially children from poor families – and to develop medium-term strategies to promote a more equitable distribution of benefits.
Trade liberalisation’s potential to promote national economic growth is internationally acknowledged. It can help countries to exploit their comparative advantage in the production of regionally specific goods and take advantage of larger markets for products that have limited local demand. Liberalisation may also generate economies of scale, increase efficiency and lower production costs. Countries can remain competitive – against a background of proliferating multilateral and bilateral trade agreements – by gaining the same access to large trading partners as their regional competitors.
Bilateral trade agreements, as opposed to more flexible multilateral ones, ensure countries’ special access to specific trade partners in exchange for greater liberalisation of tariff and non-tariff barriers and adherence to stricter regulations than those found in the international trade framework shaped by the World Trade Organisation (WTO). Experience shows that trade negotiations are generally driven by the richer trading partner and pay little heed to concerns raised by the weaker partner about potential impacts on certain economic sectors and vulnerable population groups.
Young Lives (YL) – a longitudinal childhood poverty project being implemented in Ethiopia,
India, Peru and Vietnam – is researching the mechanisms by which trade affects children. This work aims to fill an important lacuna in trade impact analyses. Findings are being used to identify possible policies and programmes that can better mitigate the negative impacts of trade liberalisation on poor families with children.
Following the lead of Latin American countries such as Mexico and Chile, Peru signed a Free Trade Agreement (FTA) with the United States in December 2005. While most economic analysis points towards overall benefits for Peru, there are concerns regarding potential adverse consequences. In order to derive maximum benefits with minimum losses, it is vital to identify appropriate mechanisms to support short-term losers – especially children from poor families – and to develop medium-term strategies to promote a more equitable distribution of benefits.
Trade liberalisation’s potential to promote national economic growth is internationally acknowledged. It can help countries to exploit their comparative advantage in the production of regionally specific goods and take advantage of larger markets for products that have limited local demand. Liberalisation may also generate economies of scale, increase efficiency and lower production costs. Countries can remain competitive – against a background of proliferating multilateral and bilateral trade agreements – by gaining the same access to large trading partners as their regional competitors.
Bilateral trade agreements, as opposed to more flexible multilateral ones, ensure countries’ special access to specific trade partners in exchange for greater liberalisation of tariff and non-tariff barriers and adherence to stricter regulations than those found in the international trade framework shaped by the World Trade Organisation (WTO). Experience shows that trade negotiations are generally driven by the richer trading partner and pay little heed to concerns raised by the weaker partner about potential impacts on certain economic sectors and vulnerable population groups.
Young Lives (YL) – a longitudinal childhood poverty project being implemented in Ethiopia,
India, Peru and Vietnam – is researching the mechanisms by which trade affects children. This work aims to fill an important lacuna in trade impact analyses. Findings are being used to identify possible policies and programmes that can better mitigate the negative impacts of trade liberalisation on poor families with children.
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