Theoretical Basis and Regulatory Framework for Microtrade: Combining Volunteerism with International Trade towards Poverty Elimination

Abstract

Poverty remains a serious global issue, and nearly half of the world's populations are still living below the poverty line. International trade has been a vehicle for successful economic development for some developing economies in East Asia, including South Korea, Taiwan, Hong Kong, Singapore, and more recently, China. With the success of their trade-based economic development policies and the export-driven development strategy, all of these countries escaped from poverty.Can other developing countries duplicate this success and also bring their populations out of poverty? Some factors, including political stability, organized government support, educated workforce, availability of foreign markets, and financial resources such as foreign loans, have been considered essential for the success of this export-driven economic development strategy. These factors are not present in many developing countries, particularly least-developed countries (LDCs), thus making it difficult for them to pursue successful trade-based development policies to break the circle of poverty.The author suggests "microtrade," defined as international trade of small quantities of locally-produced products (LPPs) produced on a small scale, as an alternative way to provide those living in LDCs with income sufficient to reduce or eliminate poverty. Microtrade, unlike the export-driven development policies undertaken at a national level, is not based on the development of large-scale export industries, which cannot be initiated by many LDCs. This article provides a discussion of the theoretical basis of microtrade and its regulatory framework from the perspective of international trade law.