International Trade Policy

Trade policy is a set of standards, rules and regulations that govern the country’s trade. A good trade policy would maintain or improve the country’s trade by regulating the tax, tariffs and  inspections regulations. Countries would look for a set of trading standard or regulations to smooth out the trading between both of them. A strategic trade policy would affect the firms strategic interactions in international oligopoly (Sen, 2005). A business can push for a trade policy that give it more advantage of over the international competitors. For example, if two producers of the same product are competing in the local market but one of them is national producer, the national producers should ask for tax or tariff put on the international producer to give it the price advantage in the local market. The U.S. entered in three free trade agreements. The second agreement was with Canada and the third was the North American Free Trade Agreement which is known as NAPTA (Taylor, 2009). The three agreements were set as a result of the U.S. experience in the globalization and multilateral system. Free trade agreement would be the best agreement the business may bush for because it lefts taxes, tariffs and quotas. Globalization would be faster and more effective between countries who agree on the free trade because the products can have fair opportunities in participating countries and the best product would be available to the consumer at the lowest price.

References:
Sen, S. (2005). International trade theory and policy: What is left of the free trade paradigm? Development & Change, 36(6), 1011-1029. doi: 10.1111/j.0012-155X.2005.00447.x

Taylor, C. O. N. (2009). Of free trade agreements and models. Indiana International & Comparative Law Review, 19(3), 569-609.