Tax free trade between NAM countries

Non Aligned Movement is an initiative that was formulated after the probability of cold war. The NAM countries are the ones which do not desire to be aligned with any geopolitical /military structure under super powers. Since then these countries have been finding solutions for the regional problems within their reach. Around 120 countries are the part of this group and 17 countries act as the observer of the same. Many issues have been dealt with under this huge structure of developing countries alliance, focusing on social issues that would help in development of countries on a whole.
Considering the present situation and significance of the organization various avenues need to be opened for the member countries. The main objective of the movement was to bring about non-proliferation of nuclear weapons amongst the countries and evade nuclear war. With the overt achievement of the object the organization can work towards drawing benefits from each other. As the member countries share an organizational bond it can be utilized to work on gaining mutual benefits.
The movement has undertaken certain other activities beneficial for the member countries. The other activities include:
Self – determination policies for certain countries (Puerto Rico, Western Sahara etc.)
Planning policies for Sustainable Development of the member countries
Reform of the UN
Facilitating South-South co-operation
Work on cultural diversity and help maintain Human Rights
Forming Working Groups, Task Forces and committees to study conditions of certain countries and help development
The activities undertaken by the organization believe on providing equal development opportunities. Understanding the need for equal development call for increasing trade between the member countries is sensed. Trade and export would facilitate more foreign investment and foreign exchange spurring the developmental process.
To facilitate trade and commerce between these countries the concept of “Tax Free Trade” should be introduced. As many of the member countries belong to the ‘developing’ status; increasing trade would profoundly work for bringing benefits for their economy.
Tax Free trade encompasses many practices and theories. The most common application of free trade is the reduction or removal of commercial barriers between countries. This allows a free flow of labor and goods between member countries in a trade pact. As free trade agreements become more common around the globe, the positive impact on developing countries has been touted as one of their greatest successes. There are several advantages to developing countries that participate in free trade. Tax Free Trade brings about a variety of benefits for the participating countries, like:
Free Trade would promote innovation and competition:
It makes economic sense to buy a product from another who specializes in such production or who can make it more easily or for less cost.
Free trade is the only type of truly fair trade because it offers consumers the most choices and the best opportunities to improve their standard of living. It fosters competition, spurring companies to innovate and develop better products and to bring more of their goods and services to market, keeping prices low and quality high in order to retain or increase their market share.
Free Trade would generate economic growth: The advantage for developing countries would be able to trade for capital–rather than having to rely on ineffective assistance programs that are subject to waste or fraud–is that the payoff is more immediate in their private sectors. Foreign investment allows their domestic industries to develop and provide better employment opportunities for local workers. This dynamic makes an increase in foreign direct investment one of the most important benefits of free trade for developing nations.
Higher employment rate: As developed countries would move trade beyond borders easily that would generate more jobs at the local levels. Increased levels of employment lead to a higher standard of living and more consumers purchasing. This ultimately sparks the country’s economy and may help to develop locally owned business
Access to new markets: Not only does free trade allow foreign-owned companies to establish themselves in developing countries, it also allows native companies to sell to foreign markets. This expands their customer base and leads to new products and services and the viability of investing in innovation. This is particularly true for small businesses in developing countries. These companies no longer have to worry about absorbing the costs of tariffs and other barriers to market entry and can sell their products freely.
Higher level of investment capital: Most free trade agreements also reduce restrictions on foreign investment. With new capital entering a developing country, it begins an upward productivity cycle that stimulates the entire economy. An inflow of foreign capital can also stimulate the banking system, leading to more investment and consumer lending.
Facilitating social and economic development:
When the standard of living of the general population would be increased social development would definitely be seen.
With better job opportunities the rate of taxes paid the government would extract would be more generating higher economic facilities and development.
Considering the above mentioned benefits of Tax Free Trade its importance can be felt more significantly by developing countries. Societies that enact free trade policies create their own economic dynamism–fostering a wellspring of freedom, opportunity, and prosperity that benefits every citizen. By breaking the cycle of poverty, free trade policies can enable even the most impoverished countries to begin to create their own dynamic toward prosperity. Since the aim of attaining MDG (Millennium Development Goals) and sustaining development is one of the important activities considered by NAM member countries facilitating ‘Tax Free Trade’ would ensure future perspectives in achieving the same.

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