Customs and Trade

Much of the history of international relations and trade concerns efforts to promote free trade among nations. The 17th century saw the growth of restrictive policies known as mercantilism. The mercantilists held that economic policy should be nationalistic and should aim at securing the wealth and power of the state. Governments were led to impose price and wage controls, foster national industries, promote exports of finished goods and imports of raw materials, and prohibit the exports of raw materials and the import of finished goods. A strong reaction against mercantilist attitudes began to take shape towards the middle of the 18th century when the liberty of production and trade was demanded and the opposition to excessively high and often prohibitive Customs duties was voiced. In the middle of the 19th century protective duties effectively sheltered many national economies from outside competition by charging extremely high rates on imports. In the later part of the 19th century England was the only country to remain faithful to the principals of free trade. Nevertheless, protectionism during the 19th century was mild in comparison with the mercantilist policies of the 17th century. The further development of multilateral trade agreements culminated in the General Agreement on Tariffs and Trade (GATT), which was signed at Geneva on October 30, 1947 by 23 countries. Being a charter governing almost all world trade, GATT sets forth the principles under which the countries shall negotiate “a substantial reduction in Customs tariffs and other impediments to trade, and elimination of discriminatory practices in international trade”.
This liberalization of trade and, consequently, foreign investment has stimulated innovation, encouraged efficiency and promoted growth. Open trade has been a driving force for stability and prosperity. It