Explain the relation between liberalisation of foreign trade and trade barriers.
The following points state the relation of liberalisation of foreign trade and trade barriers
(i) Liberalisation of foreign trade refers to removing barriers or restrictions set by the government.
(ii) Governments can use trade barriers to
increase/decrease foreign trade and to decide what kinds of goods and how much of each should come into the country. On the contrary, the government has much less restrictions. Business are allowed to make decisions freely about what they wish to import or export.
(iii) Trade barriers aim to protect the domestic producers from foreign competition. While in the case of liberalisation the government wants to improve the performance of domestic producers.
(iv) Trade barriers refer to the laws, institutions or practices which make trade between countries more difficult or expensive than trade within countries.
For example, tax on imports, limitation on imported goods i.e. quotas, etc. While removing such barriers or restrictions set by government is called liberalisation of trade.