by Quentin Morris

Created on: December 15, 2008

We live in an era dominated by Free Trade. This system is supposed to allow countries to trade freely without the hindrance of government-imposed restrictions. However the current Free Trade system is an imperfect one and many countries, including the US, impose trade restrictions in order to protect their own interests. These restrictions help to maintain the status quo of the rich West and are often criticized for penalizing the developing world. However, fair or not, these restrictions play a central role in international trading today.

The Bureau of Export Administration is the regulatory body of trade restrictions in the USA. It lists several instruments used in the restriction of trade with other countries. These include tariffs, quotas, subsidies and standards. More extreme forms of trade restriction include trade embargos and anti dumping policies. These trade restriction measures are often used together to maximize trade advantage.

Extreme restrictions

Embargoes: There are certain countries on which total trade restrictions have been imposed by the US. A full list of these can be found on the website of the Office of Foreign Assets Control.[1] These sanctions tend to be as a result of terrorist activity, proliferation of arms or if the country poses a threat to US national security. Cuba is perhaps the best example of such sanctions imposed specifically against a particular country. There are similar sanctions in place against Iran, North Korea and Zimbabwe.

Anti-dumping policies: Dumping is the name giving to the act of charging a lower price for goods in a foreign market than the price charged in the domestic market. Although this practice isn't prohibited by the World Trade Organization (WTO) it is condemned and legal action can be taken against a country dumping goods in your market. [2] In the USA petitions can be filed with the United States Department of Commerce, where business can file a trade complaint if they believe dumping has taken place on their market.[3]

General Restrictions

Apart from these particular cases there are more general trade restrictions which vary from country to country. These restrictions are usually enforced in order to protect American economic interests abroad, to regulate imports and exports and to enable American companies to maintain their competitiveness. However trade restrictions can also come into force to protect precious commodities and the volume of trade in a particular item may be limited. This is particularly

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