Question

In your own words (250 words) explain or discuss global trade and trade policy.

Answer 1

International trade policy is a trade-related strategy spanning national frontiers. A government sets up an foreign trade strategy that includes steps it would take to protect the best interests of its people and businesses.

Free trade policies or tariffs are two of the big steps the governments take. Open trade policies promote intercountry trade. A good example of this is NAFTA, the North American Free Trade Agreement, which allowed free trade across the US, Mexico and Canada

Tariffs are often levied on other nations as a potential retaliation for adverse acts or to avoid specific domestic economies from being harmed by production in other nations; a tariff means that the country gets revenue from the trade and often discourages as much trade in other regions.

International trade allows countries to widen their markets for goods and services which would otherwise not have been available at home. As a result of foreign trade, there is greater competition on the market, and thus more affordable prices, giving the customer a cheaper product home.
International trade is intercountry exchange of goods and services.
Globally, exporting offers people and countries the ability to be exposed to goods and services that are not available in their own nations, or that would cost more domestically.

Economic economists such as Adam Smith and David Ricardo understood the importance of foreign trade early on.
Nevertheless, others argue that foreign trade can be detrimental to smaller nations, putting them at a greater disadvantage on the world stage.