Analysis of Strategic Trade Policy

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Strategic Trade Policy (STP) refers to a federal policy that tries to cause transference extra proceeds within an oligopolistic global market in the direction of the domestic country businesses. Nations should always take advantage and make use of strategic trade policies because of several different beneficial reasons. First, it is worth mentioning that the use of strategic trade policies with one or more countries helps a country have links to high quality goods from neighboring countries whose production it does not have a comparative advantage of. What’s more, strategic trade policies are beneficial to the countries that embrace them because they offer an opportunity for said countries to get a readily available market for commodities that it is specialized in producing. Another way governments could put strategic trade policies to use is by protecting domestic markets. More specifically, governments protect infant industries from foreign imports to give it enough time for growth, realize development and bring down costs in the domestic market (Daniels et al., 1998).

Question 2

Trade sanctions refer to trade penalties imposed by a single nation onto one or more other countries. Governments should impose trade sanctions whenever need arises because in international trade some countries take advantage of their economic status to manipulate less developed countries so that they can buy their goods at a price that is below market equilibrium; this, in turn, makes people such as farmers suffer because they put in so much work for them to be paid little. More specifically, trade sanctions are applied with the express purpose of making it more complicated if not impossible for the countries bearing the sanction to conduct trade with the country that is imposing it (Daniels et al., 1998). It is worth mentioning that trade sanctions act as some sort of stick and carrot when it comes to matters revolving around economic and foreign policy within global trade and politics. A majority of governments that have been imposing trade sanctions have been doing so with the express intention of altering the behavior or policy or changing the attitude of another state or government.

Question 3

Economic integration refers to the unification of economic policies between different countries by means of the partial or full cancellation of non-tariff and tariff restrictions on trade occurring among them before integration takes place. The benefits of economic integration assume the form of a triad that is made up of employment, benefits from trade, and politically aware collaboration. More precisely, fiscal integration basically culminates to a lessening in the expenses that come with trade. Secondly, it leads to increased obtainability of and a broader assortment of commodities. What's more, it is worth mentioning that efficiency gains that are realized from economic integration lead to greater purchasing power (Johnson et al., 2006). Opportunities for employment have a tendency of increasing when economic integration is in the picture because trade liberalization influences technology sharing, market expansion, and cross-national flows of investment. Cooperation of a political nature among nations can be better due to consolidated monetary ties, which can assist in finding solutions to conflicts in a peaceful manner and lead to greater stability. Regional economic integration helps in global trade and assists in solving financial crisis. As such, it offers better employment opportunities, and skilled professionals can move from one region to the other.


Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (1998). International Business: Environments and operations. Addison-Wesley.

Johnson, J. P., Lenartowicz, T., & Apud, S. (2006). Cross-cultural competence in international business: Toward a definition and a model. Journal of international business studies, 37(4), 525-543.

January 19, 2024


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