Trade relations accompany the development of civilization from its earliest stages. At first everything was quite simple, everything was limited only to the in-kind exchange of goods for another good. But development went forward, and at the stage of international trade, the question of conducting trade policy arose. It is necessary to understand in more detail what its essence is.
Speaking about trade policy in general, they most often mean precisely the policy that regulates foreign trade issues. Foreign trade policy implies a set of methods, principles and levers of government influence on foreign trade relations. The most commonly used levers of foreign trade policy are taxes, subsidies, customs duties and trade rules for residents and non-residents of a particular country.
In practice, trade policy most often affects the export and import of goods. If we look at it from this point of view, then we can distinguish several models of foreign trade policy.
The first model is protectionism. It means the introduction of such rules for the import of goods, which would not allow the entrepreneurs importing them to have economic benefits from its implementation in the specified territory. Either excessive duties are established, or direct import bans. This policy is used extremely rarely, since it can entail not only economic tension in the country, but also foreign policy. Protectionism can have its own varieties. The first type is selective protectionism aimed at a specific group of goods or a specific country. The second is a sectoral one, the main purpose of which is to protect a particular industry or economy. The third is collective protectionism, which implies the application of protection measures by several countries at the same time. The fourth type is hidden protectionism, which differs from all others in the absence of the use of customs methods.
The second model of foreign trade policy is the free trade policy. The name speaks for itself. The state completely removes all trade restrictions both within the country and at its customs borders, allowing the flow of goods to ply freely. The application of such a policy is possible only if there is a developed national economy that would allow entrepreneurs to compete on equal terms with imported goods and services.
A special position is occupied by the model of monetarism, according to which the main thing for the country's economy is not the presence of a developed national economy or strong trade ties, but the abundance of money supply in the economy. From the point of view of trade relations, an abundance of funds can be achieved not only by the sale of goods produced in the country, but also by performing intermediary functions between countries that form the demand and supply for goods and services. Also, the presence of a large amount of money in the economy can be achieved through monetary policy and the development of international lending and investment. But we must not forget that the surplus of funds inevitably leads to inflationary processes.
