Strategic Trade Policy And The Choice Of Trade Policy In Developing Countries

The traditional international trade theory considers free trade is the best, but theappearance of the new phenomenon of international trade caused the economist to rethinktraditional international trade theory and policy after the war â…¡. The new trade theoryappeared it based on imperfect competition and scale economy. The strategic trade policy isthe conclusion of New Trade Theory carried out in the main developed countries firstly. Thedeveloping country can not open markets wholly to carry out free trade policy due to therestrictions of economic strength and international market environment. The developingcountry should make a choice to how to work out trade policy.This thesis analyzes the policy issuing and carrying out in the main developed economiccountries(taking the U.S and Japan as examples)and introduces the theory of Strategic TradePolicy. The third part analyzes why it is necessary that developing countries modify theirtrade policy and the feasibility of Strategic Trade Policy in developing countries. In the endwe tries to give some suggestions to developing countries as far as the Strategic Trade Policyis concerned.