Barriers to trade

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According to European Commission (Trade Barrier | Access2Markets, n.d.), “A trade barrier refers to any regulation or policy that restricts international trade, especially tariffs, quotas, licenses, etc.”

The single most fundamental understanding in international economics is that there are benefits from trade; when countries sell goods and services to one another, there is always a mutual advantage (Krugman et al., 2018). Free trade increases global output and benefits all nations. However, practically all states restrict the free flow of international trade in some way with different trade barriers. Since these limits and regulations apply to the trade or commerce of the nation, they are commonly referred to as trade or commercial policies. (Salvatore, 2013) p221) The history of trade barriers goes back to the 16th of century, since the emergence of modern nation-states when governments have been concerned about the impact of international competition on the prosperity of domestic industries. They have either attempted to shield domestic industries from foreign competition by limiting imports or to aid them in international competition by subsidizing exports (Krugman et al., 2018).

References

European Commission. (n.d.). Trade barrier. Trade barrier | Access2Markets. Retrieved November 6, 2022, from https://trade.ec.europa.eu/access-to-markets/en/glossary/trade-barrier Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Trade: Theory & Policy (p.28) (11th Edition). Pearson Education. Salvatore, D. (2013). International Economics (p.221) (Eleventh Edition). Wiley.