Commercial Policies:

Basically, the government policy with regard to trade with developing countries or third world countries is know as commercial policy. This is highly relevant in today's world where trade is an increasingly significant factor in economic growth and development. Guidelines for policy include the uniform reduction and "concertina" rules for tariff cuts, and the principle of targeting - corrective measures should be applied as close to the source of the "distortion" as possible. Relaxing the bench-mark assumptions allows exceptions to the case for free trade - "optimal" tariffs to manipulate world prices; "strategic" tariffs or export subsidies when home firms engage in oligopolistic competition with foreign rivals; and infant industry protection to allow home firms benefit from learning by doing. Protection can also raise the growth rate, though it is less likely to raise welfare in a growing economy. On the whole, with due allowance for some ambiguity, both theoretical arguments and empirical evidence suggest a pragmatic case for free trade. Commercial policy includes several areas such as free trade> and protection, tariffs and quotas, non-tariff barriers, import quotas, dumping, exchange control, international cartels, and international economic integration.

Commercial Policy

Commercial policy is highly relevant in the case of th European Union. EU's economic and trade policies aim to make the EU the strongest, most competitive single economy in the world. The members of the European Union's represent just 7% of the world's population, but they account for more than a fifth of global imports and exports. To maximize their influence on the international scene, on trade matters EU members speak with one voice. Under EU rules, the EU institutions (notably the Council of the EU and the European Commission) have exclusive competence on all Common Commercial Policy issues (tariffs, free trade agreements, etc). Thus, the European Commission negotiates all EU-wide trade agreements and represents European interests on behalf of the Union's Member States at bilateral and multilateral levels, including within the WTO.