Why don't developing countries usually benefit from free-trade policies?

ATheir industries are too weak to compete in the international market.
BThe only way they can collect revenues is through tariffs.
CThey have little economic power to influence the global economy.
DThey rely primarily on agricultural exports for their income.

The correct answer should be A.

Developing countries industries are not developed enough to compete which leads to production that can't be exported which leads to losses.

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palebadgworthy palebadgworthy · Answer 2 · 2019-05-10T13:39:23-04:00

The correct answer is A.

Developing countries tend to abandon free-trade policies and to establish protectionist measures instead because their industries are less productive than the ones from more developed countries.

If developing countries let their industrial sector to freely compete in the global markets, their industries would be the least productive and forced to close down. Therefore, commercial barriers are set in order to protect them and give them time to grow by just serving the domestic market, time to achieve efficiency gains and to adopt productive technologies so that maybe after a while they are competitive enough to go international. Moreover, charing tariffs constitutes an important economic revenue for developing countries.