What do developed countries want developing countries to liberalise their trade and investment?

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Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?

Developed countries want developing countries to liberalise their trade and investment because then the MNCs belonging to the developed countries can set up factories in less-expensive developing nations, and thereby increase profits, with lower manufacturing costs and the same sale price. In my opinion, the developing countries should demand, in return, for some manner of protection of domestic producers against competition from imports. Also, charges should be levied on MNCs looking to set base in developing nations.

Concept: Production Across Countries

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What do you think should the developing countries demand in return

Answer: Developed countries want developing countries to liberalise their trade and investment because MNCs can set up industries in small and developing nations, which are less expensive and can earn them more profit. The labour cost decreases the manufacturing cost, and these decreases in cost results in an increase in profit. Also setting up factories and industries in developed countries increases competition. The developing countries should, in turn, ask for a fair removal of trade barriers in order to protect their own industries.

How would flexibility in labour laws help companies?

Government has also allowed flexibility in the labour laws to attract foreign investment

Instead of hiring workers on a regular basis, companies hire workers ‘flexibly’ for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company.