The Principal Issues Surround the Debate on Appropriate Trade Policy

Subject: Economics
Pages: 1
Words: 273
Reading time:
< 1 min

Trade policy is based on complex principles and issues determined by the national economic environment and international laws. The two principal issues of trade policy are the debate over trust and fair competition. The liberalization of trade creates new problems and threats for local business required protection and financial support. in this case, mutual trust (business ethics) and fair competition are difficult to achieve. Trade cannot exist without trust and fair competition but these policies are often violated by modern companies.

Critics argue that the multilateral trading system has a negative impact on local economies and allows large multinational corporations to exploit the financial resources of weak and developing countries. Thus, hundreds of multinational companies and transnational corporations enter these markets paying no attention to trustworthy relations, ethical behavior and fair competition. A multilateral trading system limits national competition and leads to decline of national business and the effective performance of local organizations.

Although these reasons on the international system restricting what countries can do sound reasonable, they do not necessarily mean that the international system forces countries to take one particular approach towards their respective trade policy. Trust and fair competition are relevant to changing global environment but it is difficult for TNCs and MNCs to follow these trade policies. Today, the state as a whole should be taken as an actor in trade policymaking, and economic relations should be viewed as the main principles in the process. In this case, these ‘policy makers’ should be perceived as representatives of ‘national interest’ and should participate in the trade policy-making process.