Jasmine Gladstone

The term trade refers to buying and selling of goods and services for money or money's worth. The term is often synonymous with ‘commerce.’ It may also refer to a particular industry as in the building, tourist or fur trades. Trade is essential for satisfaction of human wants, it is conducted not only for the sake of earning profit; it also provides service to the consumers. If we speak about international trade, then it allows businesses to compete in the global market and to employ competitive pricing for their products and services. As more products become available to the market, consumers meet their needs and satisfy their wants, thus increasing customer satisfaction.Moreover, the exchange of goods and services on a global level has a significant impact on a national economy as exports grow, thus increasing the balance of international payments and significantly contributing to a country’s gross domestic product (GDP).

International trade policy means policy that is related to trading across national boundaries. A government establishes an international trade policy that encompasses actions they will take to protect the best interests of their citizens and companies. Some of the major actions governments take are free trade policies or tariffs. Free trade policies encourage trade between certain countries. A good example of this is NAFTA, the North American Free Trade Agreement, which allowed free trade throughout the United States, Mexico, and Canada. Tariffs are sometimes imposed on other countries as possible punishment for negative actions or to prevent the industry in those countries from damaging similar domestic industries; a tariff ensures the nation gets money from that trade and also discourages as much trade in those certain areas.In fact, international trade policy describes collectively the international laws and multilateral trade agreements that govern the sale of goods between different countries. Some international trade policy is made by transnational institutions such as the United Nations and the World Trade Organization (WTO), which are not directly controlled by any particular national government.