Commercial Policy

Commercial policy designates all those government policies that attempt to regulate international trade and commerce. Commercial policy includes tariffs (taxes on imports), quotas on imports and exports, and voluntary export restraints (negotiated agreements in which exporting countries agree to voluntarily limit the amount of their exports).

The goal of a country’s commercial policy is almost always to improve the country’s balance of trade. When exports exceed imports, a country normally enjoys enhanced wealth. Most commercial policy is designed to target those areas in which deficits occur and correct or at least minimize those deficits. The more concerned a national government is with protecting jobs at home, the more likely it is to take an active approach to commercial policy, putting more regulation on international trade.