This document discusses international trade between developed and underdeveloped countries. It outlines that developed countries have positive economic indicators while underdeveloped countries' GDP remains static. Developing countries are transitioning from underdeveloped. The World Trade Organization aims to ensure smooth global trade flows. Historically, countries used mercantilism and protectionism policies. The General Agreement on Tariffs and Trade and World Trade Organization conferences like Uruguay Round and Doha Round address issues between countries. David Ricardo's theory of comparative advantage recommends countries specialize in producing goods they are relatively efficient in.

1. TOPIC: DEVELOPED AND
UNDERDEVELOPED COUNTRIES
IN
INTERNATIONAL TRADE
(INTERNATIONAL RELATIONS)
HUMNA IRFAN
BS –V SEMESTER

2. International Trade
 International trade, economic transactions that are
made between countries. Among the items
commonly traded are consumer goods.
 It is the key to the rise of the global economy where
supply and demand, and therefore prices, both affect
and are affected by global events.
 A product that is sold to the global market is called
an export, and a product that is bought from the
global market is an import.
 For a country to become richer, or less poor, it must
increase its production of goods and services.

3. History and Background
 The first reasonably systematic body of thought
devoted to international trade is called
“mercantilism” its an economic theory, emerged
in 17th and 18th century Europe. The goal of
mercantalism is to promote economic self-
sufficiency and restricts imports. It is active.
 Afterterwards "protectionism"
evolve, protectionist believe in export more and
import less to increase wealth and it considered
passive.

4. Three types of countries
participate in Global Trade:
 Developed countries are those who have a positive
slope in most or all parameters that define a 1st World
country and have some chance of making a passing (or
nearly passing) grade.
 Underdeveloped countries are those countries that are
barely or not moving forward, even getting worse.
Their GDP(Gross domestic product) remains more or
less static and are bunched as Third World Countries.
 Developing countries including those countries
showing signs of going from underdeveloped to
developing.

5. Role of WTO
 The World Trade Organization (WTO) created
in 1995. It is the only international
organization dealing with the global rules of
trade and its main function is to ensure that
trade flows as smoothly. The WTO is based
on agreements signed by the majority of the
world’s trading nations.
There are 164 members of WTO since
29 July 2016.

6. Objectives of General Agreement
on Tariffs and Trade (GATT)
The WTO created this agreement signed by the
majority of the world’s trading nations. It created in
the wake of World War II. Its main objectives are:
1)There should be no discrimination.
2)MFN (Most Favored Nation) support each other in a
way to export their products without any distraction.

7. 3)If one country gave favor then other country
should also gave in return.
4)MFN status help one to export
in other country in tax and other matters.
5) A certain amount of goods fixed that you
can bring to sell in other countries.
6) Any product which is not meet the standard
level of health and safety would be banned.

8. Issue created between
Developed and Undeveloped
countries
 Issue raised by undeveloped countries
that buying of Industrial goods is more
expensive and selling their primary goods in
low prices is creating discrimination
between dominant and non-dominant ones.

9. Uruguay Round
Intellectual property was the main issue which had
been discussed in this conference.
 Due to spending more and gaining less profit,
third world country began to produce the copy of
patents of first world country and sell them in
cheap prices.
 Most of the developed countries raised issue
that third world countries are effecting
their purchase.

10. Doha Round
 The Doha Round is the latest round of trade
negotiations among the WTO membership.
 The Round is also known semi-officially as
the Doha Development Agenda as a fundamental
objective is to improve the trading prospects of
developing countries.
 This is to ensure that the rules under consideration
provide developing countries with real market
opportunities and accordingly opportunities to
enhance their development and growth prospects.

11. David Ricardo's Theory of
Comparative Advantage
 Countries should specialize in producing
those goods in which they are more efficient
producers.
 They donot produce such item in which they
earn no profit no loss.
 If countries specialize in this way, total
world production will be greater.

12. Thank you!