What is international trade policy?

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.

The term International trade policy describes the ideas, plans, laws, and agreements concerning the trade in goods between different countries, as has been agreed by their national governments or by supranational bodies such as the WTO or the European Union. Just like countries have policies about their health systems, their education systems, foreign policy, and defense policy, they also have policies around international trade. Similar to other policies, international trade policies can sometimes be used as a political instrument to put pressure on other stakeholders. In the case of international trade policy, the successful implementation of the policy is always dependent on the policy of other countries, because trade by definition involves other countries. In this sense, international trade policy differs from policy areas that are more predominantly internal, such as health and education.