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Trade policy at the national level

Yet another dimension of trade policy, along with international and regional trade agreements, happens at the national level. The United States, for example, imposes import quotas on sugar, because of a fear that such imports would drive down the price of sugar and thus injure domestic sugar producers. One of the jobs of the United States Department of Commerce is to determine if imports from other countries are being dumped. The United States International Trade Commission—a government agency—determines whether domestic industries have been substantially injured by the dumping, and if so, the president can impose tariffs that are intended to offset the unfairly low price.

In the arena of trade policy, the battle often seems to be between national laws that increase protectionism and international agreements that try to reduce protectionism, like the WTO. Why would a country pass laws or negotiate agreements to shut out certain foreign products, like sugar or textiles, while simultaneously negotiating to reduce trade barriers in general? One plausible answer is that international trade agreements offer a method for countries to restrain their own special interests. A member of Congress can say to an industry lobbying for tariffs or quotas on imports: “Sure would like to help you, but that pesky WTO agreement just won’t let me.”

If consumers are the biggest losers from trade, why do they not fight back? The quick answer is because it is easier to organize a small group of people around a narrow interest versus a large group that has diffuse interests. This is a question about trade policy theory. Visit this website and read the article by Jonathan Rauch.

In newspaper headlines, trade policy appears mostly as disputes and acrimony. Countries are almost constantly threatening to challenge the “unfair” trading practices of other nations. Cases are brought to the dispute settlement procedures of the WTO, the European Union, NAFTA, and other regional trading agreements. Politicians in national legislatures, goaded on by lobbyists, often threaten to pass bills that will “establish a fair playing field” or “prevent unfair trade”—although most such bills seek to accomplish these high-sounding goals by placing more restrictions on trade. Protesters in the streets may object to specific trade rules or to the entire practice of international trade.

Through all the controversy, the general trend in the last 60 years is clearly toward lower barriers to trade. The average level of tariffs on imported products charged by industrialized countries was 40% in 1946. By 1990, after decades of GATT negotiations, it was down to less than 5%. Indeed, one of the reasons that GATT negotiations shifted from focusing on tariff reduction in the early rounds to a broader agenda was that tariffs had been reduced so dramatically there was not much more to do in that area. U.S. tariffs have followed this general pattern: After rising sharply during the Great Depression, tariffs dropped off to less than 2% by the end of the century. Although measures of import quotas and nontariff barriers are less exact than those for tariffs, they generally appear to be at lower levels, too.

Thus, the last half-century has seen both a dramatic reduction in government-created barriers to trade, such as tariffs, import quotas, and nontariff barriers, and also a number of technological developments that have made international trade easier, like advances in transportation, communication, and information management. The result has been the powerful surge of international trade.

Key concepts and summary

Trade policy is determined at many different levels: administrative agencies within government, laws passed by the legislature, regional negotiations between a small group of nations (sometimes just two), and global negotiations through the World Trade Organization. During the second half of the twentieth century, trade barriers have, in general, declined quite substantially in the United States economy and in the global economy. One reason why countries sign international trade agreements to commit themselves to free trade is to give themselves protection against their own special interests. When an industry lobbies for protection from foreign producers, politicians can point out that, because of the trade treaty, their hands are tied.


United States Department of Labor. Bureau of Labor Statistics. 2015. “Employment Situation Summary.” Accessed April 1, 2015. http://www.bls.gov/news.release/empsit.nr0.htm.

United States Department of Commerce. “About the Department of Commerce.” Accessed January 6, 2014. http://www.commerce.gov/about-department-commerce.

United States International Trade Commission. “About the USITC.” Accessed January 6, 2014. http://www.usitc.gov/press_room/about_usitc.htm.

Questions & Answers

With the aid of diagrams,compare the short run equilibrium positions of a perfect competitor and an imperfect competitors
Monlay Reply
What is the term consultation in economics?
Nthabiseng Reply
why is it that the long run Average cost curve does not touch that of the short run curve at its minimum?
Baah Reply
In few words, what is the role of interest rate in economy?
Carlos Reply
what is population
Nyakeh Reply
total number of people in a given area or country
the total number of people at a given area or country
total number of people in a given area or country
What is price Elasticity of demand?.
The responsiveness of the quantity of a commodity demanded to a change in its price, expressed as the percentage change in quantity demanded divided by the percentage change in price.
why is it that the long run Average cost doesn't touch the short run cost curve at its minimum?
what is supply
please rice and beans will be what type of demand but note we mostly cook it together
Oladosu Reply
complementary or joint demand
but did you know you can demand for rice without beans so how is it joint or complementary
From my point of view, rice and beans are replaceable goods, hence they can't be complementary.
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Wisdom Reply
Nothing more than a purchase power, in other words, $100 now, must have the same value after 1 year.
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Lawal Reply
It can be define as a big transaction that can control any business for one place to another base.
money is recognisable note to accept both parties selling and buying
i don still understan
money is anything generally accepted as a medium of exchange
Money is anything generally accepted as a medium of exchange and for the settlement of goods and services .
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discuss human and natural resources as develop strategies ro improving living condition of citizens in developing countries.
I don't understand the question.
it's a form of currency used for 2 or more individuals or parties in order to reach their amicable personal or business attainment. one must understand that money itself can manifest in multiple fashions for which the individuals or parties adheres.
are u trying to say we shld discuss ways in which human natural resources help in improving living condition of citizens in developing countries?
money is a legal thunder generally accepted as a medium of exchange for the payment of debt ,goods and services
money is a way of payment.
money is any thing that is generally accepted as a medium of exchange good for good and settlement of debt and means of payment
money is nothing but a object which is used for exchange of goods and services.
money is anything that is generally accepted as payment of goods and services and settlement of debt
what is demand
Melissa Reply
demand is where the customer is willing and able to buy goods and services during a given period of time
demand is the ability and willingness of an individual to buy goods and services at a given price in a particular period of time
demand is the ability to buy a specific quantities of goods and services at a given price and at a specific period of time
what are the rules of demand
Rosemary Nsebon, Do you mean laws of demand?
what are the rules of demand
the rule of demand is the higher the price the lower the quantity demanded and the lower the price the higher the quantity demanded
what is unemployment
unemployment is a scenario or a phenomenon in an economy whereby people are willing are able to work but cannot a job
Suppose you have a team of two workers: one is a baker and one is a chef. Explain why the kitchen can produce more meals in a given period of time if each worker specializes in what they do best than if each worker tries to do everything from appetizer to dessert. please I need a urgent answer
Oladosu Reply
Enables individuals and countries to consume a variety of goods and services
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Oladosu Reply
competency is an ability and courage to do something perfectly
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A sufficient supply
Ebenezer you mean the (core competency) right?
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mean is the average number of a given data
median is the middle number of a given data
in a given data sorry
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Change management​ and​ cerrancy
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what's the primary location of capital and money market respectively

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