Perpetuating the global division of labour: defensive free trade and development in the third world

Yakub Halabi ()
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Yakub Halabi: Assistant Professor, Concordia University, Department of Political Science, 1455 de Maisonneuve Blvd., West Montreal, Quebec H3G 1M8, Canada

Asia-Pacific Development Journal, 2013, vol. 20, issue 1, 91-120

Abstract: This article contains an examination of whether free trade coupled with the neoliberal principles of the Washington Consensus has been turned into a defensive strategy used by developed countries in order to maintain and perpetuate the division of labour in the global market between developed and developing countries. The question is raised of whether developed countries are worried that some highly populated emerging economies may follow the path of the newly industrialized economies. As a pre-emptive measure, developed countries adopt free trade as a defensive mechanism that would create a level playing field or “fair trade” in the global market and would deliberately stifle infant, high value added industries from thriving within emerging economies. On a level playing field, infant industries cannot compete against the wellestablished corporations of developed countries. Finally, free trade also leads to another indirect outcome: it intensifies competition among developing economies in low value added goods and consequently lessens a rise in the income of unskilled labour in these economies.

Keywords: Defensive; offensive and neutral free trade; factor price equalization; Asian development model; newly industrializing economies (NIEs); high and low value added goods; Heckscher-Ohlin-Samuelson theorem; emerging economies and the Washington Consensus (search for similar items in EconPapers)
JEL-codes: F1 F5 F6 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:unt:jnapdj:v:20:y:2013:i:1:p:91-120

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