TRADE POLICY IN DEVELOPING COUNTRIES

11-1

DEVELOPING COUNTRIES ACCORDING TO THE IMF (”GRADUATED” ECONOMIES IN RED)

11-2

TARIFF RATES IN DEVELOPING COUNTRIES

Source: World Bank. 11-3

THE ASIAN TAKEOFF

Source: Total Economy Database. 11-4

ASIA’S SURGING TRADE

11-5

EXPORT PROCESSING ZONES

THE EPZ MODEL IS A VERY POPULAR FORM OF INDUSTRIAL

POLICY

The number of EPZs keeps growingMore than half of the world’s countries have them

There are around 3,000 - 5,000 EPZs in the world today

Douglas Zhihua Zeng, “How Do Special Economic Zones and Industrial Clusters Drive China’s Rapid Development?,” Policy Research Working Paper 5583, the World Bank.

PHILIPPINES:

POLAND

SIMPLE EPZ MODEL

A country: Solid boundary of import tariffs

Carve out a piece of land where the tariffs do not apply

EPZ!

EPZ

FDI

EXPORTS

IMPORTS

LABOR

INTERMEDIARIES UTILITIES

MULTINATIONALS

DOMESTIC FIRMS

WAGES

FOREIGN EXCHANGE

KNOW-HOW NETWORKS

MULTINATIONALS

DOMESTIC FIRMS

SINGLE FACTORY ZONES

SINGLE FACTORY ZONES

SINGLE FACTORY ZONES