International Trade Policy: Examples & Benefits

Each country has its own unique international trade policies. These policies also interact with trade policies governed by international institutions such as the IMF and WTO.

International trade policy is the regulatory framework that governs, explains, and provides guidelines on how a country conducts trade with other countries.

This regulatory framework often consists of specific trade laws or equivalent government policies. To understand international trade policy, from its definition, examples, and benefits, check out the full review below!

What is International Trade Policy?

Quoting feb.umsu.ac.id, international trade policy refers to measures taken by governments to regulate the direction, structure, and composition of trade between countries.

The aim is to stimulate economic growth, improve welfare, and promote national interests.

In implementing international trade policy, the government generally collaborates with relevant agencies such as the Ministry of Trade and trade regulatory agencies.

The impact of international trade policy can profoundly affect a country’s economic growth and international relations.

Objectives of International Trade Policy

Here are some of the objectives of international trade policy, including:

Making profits without harming other countries.
Meeting the needs of the people for goods and services.
Protecting domestic industry and trade.
Collecting foreign exchange through exports.
Encourage the development of domestic industry and trade and facilitate entry into the global market.
Balancing exports and imports to fulfill the country’s budget.

Benefits of International Trade Policy

The following are some of the benefits of international trade policy that you need to know about:

Ease in establishing trade with other countries.
Getting financial assistance to promote international trade.
Increased access to various products for the community.
Increased Gross Domestic Product (GDP) affects the whole economy.

Example of International Trade Policy

Quoting feb.umsu.ac.id, a country’s government can implement several examples of international trade policies. The following are some examples of such policies, among others:

Import Tariffs: A levy imposed on imported goods to protect domestic industries or as a source of revenue for the government.
Import Quotas: Limiting the number of imports for certain goods to regulate supply or protect domestic industries.
Export Subsidies: Financial assistance or support provided to exporters to increase competitiveness in international markets.
Trade Agreement: An agreement between countries, either bilaterally or multilaterally, to regulate trade and tariffs.
Free Trade Zone: An area where import tariffs between zone members are removed or lowered to encourage trade.
Import Ban: Import restrictions on certain products due to national security, health, or environmental considerations.
Non-Tariff Barriers: Technical regulations, quality standards, or administrative procedures that may affect the import of goods.
Intellectual Property Rights: Legal protection of patents, copyrights, and trademarks to encourage innovation.
Boycotts and Embargoes: Refusal to trade with certain countries as a form of political or economic pressure.
Enforcement Policy: Legal actions taken to address unfair trade practices, such as dumping or excessive subsidies.

Impact of International Trade Policy

After knowing what are the examples of international trade policies, it is then important to know their impact. Here are some of the impacts that need to be known, including:

An increased territory that a country can reach.
Increased bilateral and multilateral cooperation.
Obstacles to the growth of the domestic industrial sector.
Consumptive behavior due to cheap imported goods.
Exploitation of natural resources.
Dependence on foreign technology and capital.
Unfair industrial competition.

Can Blockchain Revolutionize International Trade?

Quoting wto.org, commerce has always been influenced by technological innovations. Recently, a new technology, blockchain, has been hailed by many as the next big player with the potential to change everything.

Essentially, blockchain has the potential to reduce trade costs, increase supply chain transparency, and offer opportunities for small-scale producers and companies.

Review the various challenges that must be overcome before blockchain technology can be widely used and significantly impact international trade.

Conclusion

In conclusion, international trade policy is crucial in regulating and directing trade between countries to achieve economic goals and national interests.

In addition, in an increasingly digitally connected era, trade policy also plays an important role in developing blockchain technology, considered the next big innovation in international trade.

Various international trade policies, such as import tariffs, import quotas, and trade agreements, impact a country’s economic growth, domestic industrial structure, and international relations.

Therefore, it is important for each country to formulate a trade policy that suits its economic and political needs and conditions and to monitor and evaluate the impact of the policies implemented continuously.

That was a complete discussion of 10 examples of international trade policies and their various benefits. Furthermore, you can also read other interesting articles in the collection on INDODAX Academy.

Using the blockchain education facilities provided by INDODAX Academy, you are expected to gain a deeper understanding of effective trading strategies.