Free trade for financial firms to benefit the third world?
Writing by abuhatem on Monday, 3 of December , 2007 at 6:53 pm
The Guardian - Comment is free: Free trade for Wall Street
In the same vein, we should sit down with state and local treasurers and ask them what prevents them from taking advantage of the lower bond underwriting commissions that could be charged by investment banks in Mumbai or Hong Kong. This could save taxpayers nationwide billions of dollars each year in bond underwriting fees. Similarly, we can ask start-up companies in the Silicon Valley why they don’t seek to use Indian or Chinese investment banks for their initial public offerings, saving billions on fees and removing an important obstacle to gaining access to capital on world financial markets.
Free trade policies that removed barriers to financial firms in the developing world would both hasten growth by increasing efficiency and also lead to a more equal distribution of income.
Free trade helps both the developing and developed world by increasing competition and opening up the field to foreign markets. Foreign direct investment (FDI) by multinational corporations into the developing world causes immense economic growth. Just look at Dubai and Qatar ten years ago, in 1997, compared to today. There is no comparison. Thomas Friedman remarked on this fact in a column a few weeks ago. Competition in a market was always a cause of competition for everyone.
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