Commercial Policy

A A A

DEFINITION

The regulations and policies that determine how a country conducts trade with other countries. A country's commercial policy includes the use of tariffs and other trade barriers, such as restrictions on what goods can be imported or exported, and which countries are allowed to import or export goods to the home country.

Countries that are part of an economic union often have a single commercial policy that determines how member countries can interact with non-member countries. An example of an organization with a common commercial policy is the European Union.



INVESTOPEDIA EXPLAINS

Commercial policies are a point of contention in international trade, and are one of the underlying reasons for the existence of organizations such as the World Trade Organization (WTO). Because a country's commercial policy can include the use of tariffs and trade barriers, free trade is negatively impacted.




RELATED TERMS
  1. Free Trade Area

    A group of countries that invoke little or no price control in the form of tariffs ...
  2. Tariff

    A tax imposed on imported goods and services. Tariffs are used to restrict trade, ...
  3. Voyage Policy

    A financial protection plan that provides coverage for goods in transit by sea. ...
  4. Import Substitution Industrialization ...

    An economic theory employed by developing or emerging market nations that wish ...
  5. Trade War

    A negative side effect of protectionism that occurs when Country A raises tariffs ...
  6. General Agreement On Tariffs And ...

    A treaty created following the conclusion of World War II. The General Agreement ...
  7. Protectionism

    Government actions and policies that restrict or restrain international trade, ...
  8. Eurasian Economic Union (EEU)

    An economic union created in 2014 by a treaty signed by Russia, Kazakhstan and ...
  9. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate that some of the ...
  10. Global Recession

    An extended period of economic decline around the world. The International Monetary ...
Related Articles
  1. What Is International Trade?
    Personal Finance

    What Is International Trade?

  2. Globalization: Progress Or Profiteering?
    Economics

    Globalization: Progress Or Profiteering?

  3. The Basics Of Tariffs And Trade Barriers
    Economics

    The Basics Of Tariffs And Trade Barriers

  4. What Is The World Trade Organization?
    Economics

    What Is The World Trade Organization?

  5. How Countries Deal With Debt
    Credit & Loans

    How Countries Deal With Debt

  6. The Taylor Rule: An Economic Model For ...
    Economics

    The Taylor Rule: An Economic Model For ...

  7. Taking Advantage of Pessimism
    Economics

    Taking Advantage of Pessimism

  8. Where The Equity Opportunities Are
    Economics

    Where The Equity Opportunities Are

  9. Frontier Stocks: 3 Reasons They're A ...
    Economics

    Frontier Stocks: 3 Reasons They're A ...

  10. A Quarter Century of Emerging-Markets ...
    Economics

    A Quarter Century of Emerging-Markets ...

comments powered by Disqus
Hot Definitions
  1. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  2. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  3. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  4. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  6. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
Trading Center