COMMERCIAL POLICY

COMMERCIAL POLICY

       In the words of Haberler, “By commercial policy or trade policy is meant all measures regulating the external economic relations of a country, that is, measures taken by a territorial government which has the power of assisting or hindering the exports or imports of goods and services”. In modern times, the commercial policy of very country is generally based on the encouragement of export and discouragement of imports. The exports are encouraged by giving preferential freight rates on, exports consular establishments, subsidized merchant marines etc. the imports are hindered by erecting the traffic walls, exchange controls, quota system, buy at home campaign, etc.

        The study of commercial policy is split up into two sections, firstly, the objective and secondly the instruments that instruments that are employed for achieving these objectives.

THE OBJECTIVES OF THE MODERNS COMMERCIAL POLICY

       The main objectives of the modern commercial policy are:

i) To increase the quantity of trade with foreign nations.

ii) To preserve, the essential raw material for encouraging the development of domestic industries.

iii) To stimulate the exports of particular products with a view to increasing their scale of production at home.

iv) To prevent the import of particular goods for giving protection to infant industries or developing key industry or saving foreign exchange. Etc.

v) To restrict imports for securing diversification of industries.

vi) To encourage the imports of capital goods for speeding up the economic development of the country.

vii) To restrict the imports of goods with a view to correct the unfavourable balance of payments.

viii) To assist or prevent the export or import of goods and services for achieving the desired rate of exchange.

ix) To enter into trade agreements with foreign nations for stabilizing the foreign trade.