Financial flows and global integration

Abstract

This paper focuses on the post-war process of creation of global trading system and integration of world trade. As the former came into being, multilateral trade liberalization became an on-going feature of the global economy facilitating international trade, consequently importance of international trade in the global economy increased dramatically. Since the mid-1980s, mindset regarding trade policy in the developing economies, particularly middle- and high-income ones, began changing in a discernible manner. They liberalized their trade policy regimes and tried to integrate with the global economy. Several developing economies were highly successful in integrating with the global economy through trade. The change in mindset of policy mandarins was clearly visible during the Uruguay and Doha Rounds of multilateral trade negotiations. Although the industrial economies were the primary beneficiaries of the multilateral trade liberalization, for the developing economies trade, particularly trade in manufacturing goods, went on increasing monotonically. The kaleidoscope of global trading system turned several times and international trade has enormously expanded over the preceding half century, which in turn contributed substantially to global integration through trade, albeit in a selective manner