Trade policy defines standards, goals, rules and regulations that pertain to trade relations between countries. These policies are specific to each country and are formulated by its public officials. Their aim is to boost the nation’s international trade. A country’s trade policy includes taxes imposed on import and export, inspection regulations, and tariffs and quotas.
TRADE POLICY AND INTERNATIONAL ECONOMY:
As open market economy prevails in most developed countries, international economic organizations support free trade policies while developing nations prefer partially-shielded trade practices to protect their local industries. Today’s era of globalization depends on sound trade policies to reflect market changes, establish free and fair trade practices and expand the possibilities for booming international trade.
TYPES OF TRADE POLICIES:
1. National trade policy
2. Bilateral Trade Policy
3. International Trade Policy
Constituents of Trade Policy:
Every country has the right to impose taxes on imported and exported goods. Some nations levy heavy tariffs on imported goods to protect their local industries. High import taxes inflate the prices of imported goods in local markets, ensuring that local products are more sought after.
2. Trade barriers:
They are state-imposed restrictions on trading a particular product or with a specific nation. Some of the most common forms of trade barriers are tariffs, duties, subsidies, embargoes and quotas.
This determinant ensures that only high-quality products are imported in the country. Public officials can lay down inspection regulations to ensure that the imported product conform to the set safety and quality standards.