What are methods to increase trade between countries and methods to restrict trade between countries?

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thanatassa eNotes educator| Certified Educator

There are many different methods countries can use to promote or restrict international trade. In each case, the choice of methods can have wide ranging economic and political consequences. 

Trade Agreements: Nations can negotiate bilateral, multilateral, regional, and global trade agreements to increase trade; NAFTA is an important example of this. These can include many different elements including removing barriers such as tariffs, reducing non-tariff barriers such as customs regulations, and sharing standards. "Favored nation status" is another common element of trade agreements.

Currency Manipulation: In general, increasing the value of a nation's currency makes imports cheaper while devaluing a currency makes exports cheaper to international buyers. Controlling exchange rates (often as follow-on effects to interest rate manipulation) can affect the flow of international trade. There is the potential though for political fallout to overt currency manipulation.

Trade Barriers: Countries can use laws and regulations to restrict trade. While this can protect fledgling industries and restrict foreign access to innovations of strategic military importance, it can spark trade wars and protect inefficient industries, harming consumers by artificially maintaining prices.