Sample Economics Paper on Interests of Creating Trade Policy

Interests Creating Trade Policy

A trade policy is a specific principle that governs diverse buying and selling activities across and
within borders. Implementation of these policies affects or benefits different stakeholders differently
(Zhae, 2008). According to Feenstra (1995), effects include losses because of interfering with
production and benefits from favorable trade terms and shifts. Trade policies implemented in the
financial industry include quotas, tariffs, and free trade, and they have a significant impact on the
economic growth of a country.
Globally, creating a preference in trade is reshaping the economic system (Clausing, 2001).
Much preference should direct towards consumers during the creation of a trade policy. According to
Clausing (2001), once a principle favors consumers, benefits accrue to all parties, including the
businesses and their employees. For example, free trade involves all restrictions (e.g., quotas) on trade
cut off to benefit a buyer. There is a free flow of goods and services at considerable costs and various
goods to choose from. With free trade, exports and imports are encouraged, which elevate economies of
scale, a win-win situation for consumers, businesses, and their employees.
A beneficial trade policy creates economic growth (Rodrik, 1992). When there is an unstable
one, it can be more dangerous than not having one, leading to economic stability complications (Rodrik,
1992). In turn, the businesses fail, and therefore consumer needs are not met.

Summary

Consumer needs should take the central concern in creating trade policy. Consumer preference is
an essential aspect of creating trade policy, not only to the consumer but also to the producers. However,
one elevates customer benefits; it should not be at the expense of other parties, therefore assessing
agreements regularly.

CREATING TRADE POLICY 2

References

Clausing, K. A. (2001). Trade Creation and Trade Diversion in the Canada- United States Free Trade
Agreement. Canadian Journal of Economics, 34(3), 677-696
Feenstra, R. C. (1995). Chapter 30 Estimating the Effects of Trade Policy. Journal of International
Economics, 3, 1553- 1595
Rodrik, D (1992). The Limits of Trade Policy Reform in Developing Countries. The Journal of
Economic Perspectives, 6(1), 87-105
Zhae, Y (2008, September). The Analysis of Trade Policy Formal from the Benefit of Producer and
Consumer. International Journal of Business and Management, 3(9), 62- 64