Commercial policy

A commercial policy, also known as a trade policy or international trade policy, is a government's strategy for managing international trade. It encompasses topics ranging from free trade, which imposes no restrictions, to protectionism, which involves high restrictions to safeguard domestic producers. Regional Trade Agreements (RTAs) are designed to boost trade within specific regions and can serve as stepping stones for broader multilateral deals. However, critics argue that RTAs may unfairly favor some nations over others. For instance, China has used regional agreements with ASEAN to counterbalance the economic influence of Europe and the United States. Bilateral Free Trade Agreements (FTAs) involve two countries reducing trade barriers like tariffs and import quotas to promote trade and investment. The U.S. has several such agreements, including NAFTA and a treaty with Israel. While supporters argue that these agreements enhance competition and market access, critics contend they may exploit smaller nations. Similarly, Preferential Trade Agreements (PTAs) allow countries to negotiate mutually beneficial deals, often faster than through the World Trade Organization. Examples include NAFTA, the EU, and ASEAN. However, opponents highlight issues like origin certification, which can disadvantage smaller countries. Tariffs and import quotas are key tools in commercial policy. Tariffs tax imports, aiming to protect domestic industries but sometimes sparking trade disputes, as seen with the Trump administration's tariffs and retaliatory measures. Import quotas limit the quantity or value of imported goods to protect national interests or balance trade. These policies reflect the complex interplay between promoting free trade and protecting domestic ...