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Foreign Trade Policy

Published 01 Sep 2020

Foreign Trade Policy

Foreign trade policy are the measures taken to regulate a country's foreign trade in line with the targets it has set. The aim is to directly limit, encourage and regulate the country's trade flows. Foreign trade policy carries some purposes. Generally speaking, these purposes are;


· Purpose of Elimination of Foreign Payments Imbalances: Countries with a deficit in their payment balance aim to restrict foreign exchange expenditure transactions, while increasing their foreign exchange earning transactions.

· Purpose of Protection from Foreign Competition: It aims to protect the domestic industry that cannot withstand foreign market competition.

· Economic Development: Foreign trade policy is a tool of the industrialization strategy. In this way, economic development is aimed.

· Economic Liberalization: It is the purpose of the integration of the national economy and the world economy.

· Purpose of Ensuring Internal Economic Stability: It is the foreign trade policy aim applied in order to solve the inflation and unemployment problems that disrupt the domestic economic stability.

· Purpose of Elimination of Market Failures: The purpose of reducing the monopolies spreading in the domestic market by the state and increasing competition.

· Purpose of Providing Revenue to the Treasury: It is the purpose of generating an important income for the state treasury with export and import taxes.

· Autarchy: It aims economically self-sufficiency.

· Social goals: Restriction or prohibition of entry or exit for reasons such as security of the country, prevention of pollution, etc.· Political Objectives: It is a situation where a producer group is favored for political reasons.

· Foreign Policy Objectives: Foreign trade policy is similar to foreign policy. For example, the sale of military-critical products to enemy countries may be prohibited.


Foreign trade policy generally aim the above-mentioned objectives. Also foreign policy tools were adopted by foreign trade policy. These tools are:

Customs Tariffs

Non-Tariff Vehicles

Affiliated Trade

Encourage of Export