Economics Sample Essay on International Trade Policy

International Trade Policy


International trade refers to a flexible and valuable commitment between global countries to undertake trading activities conducted in free markets. The International Trade Policy is an agreement between trading nations to co-operate in undertaking economically efficient free trade activities. It is also a contractual agreement to allocate economical, governmental, and environmental resources efficiently in order to improve various trading sectors. The resources mainly include technologies, information and management techniques among trading countries. They are utilized in improving production of goods and services traded in a free international market. The commodities are supplied to nations able to access and afford, further increasing earnings and revenues from international trade. Consequently, global governments conduct international trade to improve economies and living standards (WTO, 2009).

International Trade Policy

            The International Trade Policy was established to accomplish the following goals and objectives. Foremost, it was formulated to permit and facilitate expansion of more free trading activities across global nations. This objective was established aligned to the development policy across global countries involved in international trade. Global nations aim at retrieving increasing benefits from expanded free international trading activities to expand economies and record growth and development. Thus, International Trade Policy is conducted regionally as well as bilaterally under multilateral negotiations. The policy is important in creating an international legal system legitimately providing guarantees among international actors participating in international trade (WSM, 2008).

International trade provides an opportunity among undeveloped, developed and developing countries to improve global economies. However, the International Trade Policy is more considerate to undeveloped and developing countries. The considerations are aligned to further improve economies among the countries. The economies are often regarded as struggling due to high levels of poverty, unemployment and poor living standards. Thus, the International Trade Policy aims to ensure all global nations participating in international trade are awarded equal opportunities to conduct beneficial commercial activities in a free market (WTO, 2009).

The International Trade Policy was also formulated to integrate global trading activities in a multilateral trading system facilitating flexibility, competency and creation of value. It is however regarded as a dictatorial trading policy among developing countries. This is because, the policy dictates how they are integrated in global economies efficiently and effectively to facilitate and promote fair and equal trading opportunities. The International Trade Policy aims at ensuring countries are able to grow and expand to high economic levels. However, participants from developing nations do not acknowledge this vision. Instead, they regard the policy as a trading regulation encouraging developed nations to grow and develop economically at the expense of developing countries. Consequently, they regard the policy as an economic measure aimed at forcing developing nations to accept aid from wealthy developed countries. Thus, developing nations do not regard the policy as a regulation aimed promoting international trade to improve free markets and global economies (WSM, 2008).

The International Trade Policy was formulated to end poverty among developing nations. It combines governance and economic policies and reforms to establish and create opportunities for nations participating in international trade. Consequently, it was established to facilitate the participating nations take advantage in achieving globalized economic growth and development. However, International Trade Policy has facilitated the development of unequal and unfair global competition. The terms and conditions consisting the bilateral and multilateral trading arrangements and policies dictate countries either benefiting or loosing from conducting international trade (WSM, 2008).

Policies facilitating and promoting free international trade are formulated and implemented to eradicate trading barriers. Thus, they open up marketing opportunities for participating nations to achieve a comparative advantage. A comparative advantage aligned to International Trade Policy ensures global trading countries efficiently and effectively compete for a market position in the free international trading arena. For example, developing nations ought to intensify on labor and low-skilled trading activities including the light and agricultural industries to achieve a comparative advantage. Conversely, developed nations ought to manufacture technology-intensive goods and services accessible and affordable to both developed and developing nations in a free market. More so, developed nations comprise of highly educated, trained, skilled and experienced employees often found in urban areas. Urban areas encourage investments and innovation in order to increase economic values in the country. Thus, developed nations should manufacture high technology commodities and expertise services such as engineering, banking and accounting and provide them in a free international market (WTO, 2009).

However, there are situations during which barriers are imposed against free international trading activities. The barriers include import quotas, export and import licenses, subsidies, embargo, trading restrictions and currency devaluation. They are imposed in order to increase trading costs and prices of commodities traded in a free international market. Thus, the barriers reduce economic efficiency and competitive advantage. They are important and necessary in situations seeking to regulate unhealthy and unsafe commodities traded in a market. They are also applicable in obstructing free trade of imports and exports violating economic and government policies and regulations (WTO, 2009).

A trade barrier can be imposed to reduce and eliminate the trade of illegal and unhealthy commodities such as illicit drugs. More so, it can be imposed against trading countries perceived to pose danger on security measures adopted among other nations conducting economic activities in an international market. Quotas can be imposed on commodities to reduce the number of nations able to afford to purchase and import them. The prices are set too high blocking nations from accessing and affording the commodities. For example, Europe imposed a one percent tariff on raw cocoa and a thirty percent tariff against processed cocoa from Africa (WTO, 2009).

Imposed trading barriers against free trade affect diverse economies and governments differently. The Word Trade Organization formulated and implemented trading tariffs enforceable and negotiable among trading countries. The tariffs were aligned in developing and expanding global trade through protected bilateral and multilateral commercial agreements. When Europe imposed tariffs on cocoa products from Africa, it ensured the barriers were economically beneficial and wealthy. Thus, Europe collected exorbitant tariffs while Africa accounted for trading losses further destroying the struggling economies (WTO, 2009).

Trading barriers also facilitate wealthy economies to export excess commodities at low prices an activity referred to as dumping. This further increases poverty among domestic producers, as they cannot compete with wealthy economies. Consequently, developing nations lack trading incentives to grow and develop local industries to improve their economies. However, barriers on illegal and illicit products such as drugs and weapons ensure global countries improve national security. More so, they ensure companies manufacturing drugs acquire patents to protect and recoup the products from illegal, unsafe and lethal innovators (WTO, 2009).


International trade was established to improve economies among participating nations. It provides a free market through which high quality commodities accessible and affordable to participating nations are supplied as imports and exports. Trading barriers are important in regulating free trade. Besides ensuring safe and healthy commodities are traded, they also promote and safeguard free and fair competition. Thus, trading barriers should be imposed to benefit participating countries in equal and fare measures.


World Savvy Monitor (WSM). (2008). International Trade Policy: Global Poverty and International Development, World Savvy Monitor Report.

World Trade Organization (WTO). (2009). Flexibility in Trade Agreements, Word Trade Organization Report.