Government's role in tradeWhat role should government play in international trade?

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accessteacher's profile pic

accessteacher | High School Teacher | (Level 3) Distinguished Educator

Posted on

This, as other editors have established, is a rather difficult question to answer conclusively. On the one hand, government has a responsibility to ensure that there are no trade barriers that can interfere in free trade. However, governments also have the responsibility to look after their own citizens, and this leads some to adopt protectionist measures, raising trade tarrifs and also moving to subsidise its own businesses to protect them. Ideally, a government should try and achieve a happy medium between the two, though how this works out in practice is another matter.

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catd1115 | Middle School Teacher | (Level 3) Assistant Educator

Posted on

This question is clearly based on your own viewpoints. Each of us can argue for one side or the other and in modern society most of us are looking for a government that falls somewhere in the middle.

We want our government to regulate health and safety issues. We want to know that international goods are being held to a particular standard, just as we ask that goods made in America are.

We don't want government to over restrict our access to international goods. We want choices and opportunity. We want the market to determine prices for goods.

Beyond that, it really is individual preference based on your views and economic situtation. Many in America would like to see greater regulation on foreign goods to force consumption of goods made in America. They would also like to see greater restrications on multinational companies. They want goods to be made, sold and bought here in AMerica, cut out everyone else. Others want to see less restrictions in international trade. They want the market to regulate itself. If goods can be made better, faster or cheaper elsewhere then let them do it and give the consumer the option.

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vangoghfan | College Teacher | (Level 2) Educator Emeritus

Posted on

Ideally governments should make sure that imported products are safe and that the costs of producing them are not subsidized by foreign governments. If they are subsidized, then I can see a case for tariffs. The playing field should be level, with a minimum amount of undue government interference on either side.

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rrteacher | College Teacher | (Level 2) Educator Emeritus

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Trade and politics go hand in hand, because even if we pursue a free trade policy, there is nothing to say that other countries have to pursue such a policy. This is not to mention the myriad of environmental, human rights, military, and other concerns that arise from doing business with other nations. The idea of totally free trade, like the idea of absolute free markets, is unattainable even if it was actually desireable.

literaturenerd's profile pic

literaturenerd | High School Teacher | (Level 2) Educator Emeritus

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I have to agree that the government needs to look out for its citizens. If they did not have involvement in international trade, very unsafe products could come into the US unrestricted. There is a reason that some drug agencies only do Internet trade--because their products are unsafe and the government is protecting its citizens.

mwestwood's profile pic

mwestwood | College Teacher | (Level 3) Distinguished Educator

Posted on

Since anything that the U.S. government has become involved in has created problems, less government in trade may be the better decision.  Certainly, Jefferson's words hold true:  That government that governs best, governs least.

Working with the Department of Commerce, the International Trade Administration does promote the general benefits of trade; however, many ITA activities resemble the failed policy of mercantilism, which economist Adam Smith tried to eliminate more than 200 years ago. The ITA has been criticized for confusing free trade with “fair trade,” a code word for protectionism. 

Here is a report that is an argument against government regulation of trade:

According to a University of Michigan study, the average U.S. family of four still stands to gain an estimated $7,800 per year if there was total elimination of global barriers to trade in goods and services. The World Bank has reported that the elimination of global trade barriers could lift 300-500 million of the world’s poor out of poverty over the next 15 years.

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litteacher8 | High School Teacher | (Level 3) Distinguished Educator

Posted on

I do not agree that the government should play a minimal role in international trade.  I think that some of the products we get from other countries are not safe, and companies that trade with them manage to hide it from us until the government forces them to follow regulations.

enotechris's profile pic

enotechris | College Teacher | (Level 2) Senior Educator

Posted on

A minimal one. Having government instead of the market choose what companies will trade internationally invites politics and its associated back-door deals into the transaction.  If the purpose of international trade is to supply goods and services that the rest of the world demands, then the only purpose of government is to ensure that nothing interferes with the transaction between international producers and consumers.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

Tough one to know for sure.  A lot of people these days are thinking that governments should be more involved.  They think that governments should pick and support "national champions."  The governments would help these companies compete internationally.  This is something of a fad these days because China is doing so well using such a policy while the more free trade-oriented countries are struggling.

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shawn52 | Student, Undergraduate | eNotes Newbie

Posted on

government play an important role in trade.. look if an organization ignore the government then it is not possible for the organization to continue its trade because what if government change its rule of trade?

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