What is meant by trade policy?

What is meant by trade policy?

Trade policy objectives

This emergency contrasts in many ways with the food price crisis of 2007-2008. On the one hand, world grain stocks are substantially higher and good staple food harvests are expected, especially in the United States. On the other hand, oil prices are at historic lows, in contrast to the upward trend that in the past crisis pushed up fertilizer and food costs, induced substitution of energy-intensive crops and encouraged speculation in commodity markets.

On the trade policy front, in the previous crisis more than 30 countries adopted different measures to limit exports, affecting 28% of world trade. Today, only a dozen have implemented protectionist measures and their estimated impact on trade is 6%. Some quantitative restrictions have even been eased, such as Vietnam’s ban on rice exports.

Commercial policy pdf

Official tariff that sets the duties to be paid in various areas, such as legal costs, railroads, customs. The customs tariff is a government instrument with a tax scope that includes the systematic arrangement of goods (nomenclature) with the respective taxes (taxable rates) that are applicable to the value of the imported goods.

The WTO is important for underdeveloped countries because it brings stability and predictability to international trade, since its rules are legally binding, as are the schedules of commitments on market access for goods and services negotiated by each Member of the Organization.

Mexico’s trade policy

A country’s economic authorities have a series of measures or instruments at their disposal to develop its trade policy. The aim of this policy is to ensure that trade in goods and services with other countries contributes to the economic development of the State itself and, therefore, trade policy measures should, in principle, be adopted to compensate for any unnecessary imbalances or economic damage that such trade may cause to certain regions or national economic sectors.

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Evidently, they are not always adopted for this purpose and, when they are, they end up harming the general economic growth of society to the benefit of a small group of society. For this reason, trade policy measures have been the focus of international efforts to liberalize trade within the framework of the competition that characterizes the free market system.

Faced with high competition in the market and the tendency to reduce costs and cut expenses, entrepreneurs focus on their core business and outsource the management of secondary activities…

Types of trade policy

There is no doubt that international trade has an impact on the economic growth of countries. This is because the difference between exports and imports is one of the components of gross domestic product (GDP).

Countries have different trade policy tools at their disposal. First, we will focus on restrictions or barriers that have the effect of increasing the cost of imports. These measures can be classified into two:

Another tool that can be used to increase the competitiveness of local firms is the subsidy. Thus, the government provides economic support to exporting companies or companies in a sensitive sector that compete with lower-priced foreign products.

As a counterpart, the government can adopt a trade policy of opening up to the outside world, reducing or eliminating the barriers mentioned above. For example, the ad valorem tariff rate on certain products can be lowered.

At a microeconomic level, we can refer to a company’s trade policy as those decisions that the organization makes in order to achieve its sales objectives and consolidate its business.

What is meant by trade policy?
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