Trade Policy and Its Implications

Abstract

Adoption of relevant trade strategies has been the bone of contention in the post-colonial period particularly since the 1950s in developing countries. But what has been the real story behind the turn of economic events in respect of diverse economies such as Korea and India. Is Korea completely protection-free? Did export-led strategy led to higher growth in Korea? Is the slow growth in India mainly due to IS/ strategy? This article attempts to analyse various trade policies adopted since the 1970s in both India and Korea and will evaluate its performance in these two economies. While Korea had forged ahead in a rapid and sustained way in pushing up its exports thereby accelerating the overall growth rate of the economy, India, on the other hand, failed miserably to increase export momentum eventually resulting in its export share in world exports dwindling to an insignificant share at present. Enormous literature in this area support the argument that it is mainly because of the active state intervention Korea could march forward in conjunction with selective competition policies. Korean experience further suggests that both import-substitution and export-oriented policies when employed together and effectively would bear desired results.