ABSTRACT

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book examines the classic perspectives of economic thought. It also examines some of the historical theories about protectionism, tariffs and customs unions. The book argues that there has been a gap between theory and experience due to a changing world production structure and its effects on the decisions of governments and corporations. It examines how existing theories of trade policy explain the 1980s move towards freer trade among countries across the globe. The book discusses the spread of liberal economics, arguing that domestic models of foreign economic policy-making are insufficient. It explores the politics of trade policy and the new economics of institutions. The book analyses the domestic factors affecting interstate economic co-operation and the conditions under which states conclude agreements to liberalize commerce. It describes the impact of geographic characteristics on trade, and the impact of trade on income.