strategy

Trading between different economic systems

Synonyms:
East-West trade
East-South trade
North-South trade
Strengthening trade among different economic systems
Description:
Increasing trade with nations under different economic systems including setting up new production facilities, expanding and modernizing existing plant capacities, developing and exploiting natural resources, developing or improving infrastructure, subcontracting, joint assembling, and other means of producing jointly; cooperating in science and technology, cooperating in economic planning and cooperating in ventures in third countries.
Context:
While trade between different economic systems has existed for centuries, the most recent developments in this area have occurred between communist China and the Western economies and between Eastern bloc nations and the third world.
Implementation:
The broad objectives of the strategy are accepted by the negotiating parties in a form acceptable to other trading nations. Current objectives are the development of trade with less developed countries and non-discrimination in trade between nations and groups of nations. Trade negotiations between the parties proceeds from general trade policy decisions to specific trade agreements. The payment conditions may be affected by special credits or subsidies arranged by the seller nation. They may include barter as a means of settlement. Technical assistance may be arranged to promote production in the less developed country under the terms of the agreement.
Claim:
1. For those with different economic systems, the systems themselves stand as trade barriers. The strategy of trading between these systems attacks these barriers and promotes economic development. 2. Governmental assistance from the more to the lesser resources are mustered as a matter of government policy. 3. Access to specific markets is opened to producers under pre-determined legal conditions of trade.
Counter Claim:
1. Economic crises in the more developed countries which adopt this strategy reduce their total trade volume, including that with the less developed trading partner. This partner has to share the problem of unstable markets and will not get preferential treatment under a non-discriminating agreement. Nations operating on the principles of planned economy cannot react rapidly to free market conditions in the rest of the world. They are less able to comply with the terms of their trade agreements. 2. For the lesser developed country, the strategy of promotion of trade with all nations rather than those using specific economic systems would appear more favourable to trade expansion objectives.
Constrained by:
Strengthening trading blocs
Values:
Uneconomic
Subjects:
Trade
Systems
Economic
Type Classification:
D: Detailed strategies