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
