The following is a review of the tools that countries may use in pursuit of their objectives. This analysis is not limited to the tariffs ...
The following is a review of the tools that countries may use in pursuit of their objectives. This analysis is not limited to the tariffs and other border measures that the country itself may use as instruments of trade policy. A TPF should examine all measures that the country employs, as well as those of its trading partners, that affect the ability to produce, export, and import goods and services, including those that are used for purposes other than commerce per se. A TPF should provide a thorough review of all such measures at home and abroad. Those employed by the country itself should be reviewed with a view towards their improvement and adjustment, which may lead to recommendations for changes in laws, regulations, budgets or policies. The barriers, subsidies or other interventions that are employed by a country’s trading partners might variously be addressed through negotiations or other representations to the partner,
or — in extreme cases — could merit the adoption of countermeasures or the pursuit of complaints in the WTO’s Dispute Settlement Body. The more important of these tools are summarized in table 9, distinguishing them according to what they aim to achieve and where they are implemented. The measures that are imposed at the border are typically instruments of trade policy (narrowly defined), but many of those that are behind the border may be motivated primarily by other goals and might be only incidentally related to trade. Some of these instruments are wholly in the hands of government, while others (notably the trade-remedy laws) are usually triggered by petitions from the private sector. Whatever the rationale behind these various instruments, together they give countries a large toolbox that they might open whenever they think it is time to intervene in domestic and international markets. There is no hierarchy among the instruments shown in table 9, as their relative importance to countries will vary according to their circumstances. Countries differ with respect to their locations, geographic types and endowments of natural and human resources, and also show a great diversity in the depth and composition of their economies and the structure of their political institutions. All of these considerations affect the relative importance attached to any given instrument. There are some countries in which tariffs remain an important instrument of industrial policy, 24 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES for example, and may also be a major source of government revenue, while other countries impose few or no taxes on imports and exports. The same might be said of other implements that figure prominently in the toolboxes of some countries, and are altogether absent in others
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