ABSTRACT
This chapter offers a brief over-view of six instruments of trade policy the tariff, the tariff quota, the state trading monopoly, the embargo, the import quota and the subsidy which have had an important impact, direct and indirect, on primary commodity trade. The economic impact of an embargo depends on the conditions under which it is introduced so that no generalisations are possible. Examples of the conferral of subsidies are manifold although for the purposes of this discussion only those applying to raw materials are of direct interest. The agricultural sector of developed countries provides the clearest illustration: reference has already been made to the price supports and export subsidies applied under the EEC's Common Agricultural Policy and to the subsidy schemes governing certain farm sectors in the US. As Hallett has suggested in a recent study, the use of deficiency payments requires an adequate administrative framework and is limited ultimately by budgetary constraints.
