Industrial Policy Trade Agreements

Attention to industrial policy, both in developed and developing countries, is experiencing a renaissance in the 21st century. With a globalized market characterized by growing links between trade, investment, services, technology and global value chains, current industrial policy initiatives reflect a broader perspective on the measures needed to build national capacity and systems. The focus is not only on strengthening the internal market, but also on improving links with international markets to improve trade opportunities through trade and investment. Product quality, a rapid response to business requirements and the link to international technological developments become important policy objectives. This is why new investments focus primarily on building national technological capacity and often involve public-private partnerships and innovative sustainable industrial policies. National industrial policy is a series of economic reforms aimed at changing the industrial structure of a country`s economy. Proponents of national industrial policy are opposed to an unfettered market and believe that the government must promote economic growth more than just fiscal and monetary policy. One of the best-known supporters of industrial policy was Professor Robert Reich at Harvard. He said in the 1980s that the U.S. economy “has dissolved since the 1960s.” (McKenzie, n.d.). He argued that he was guarding himself in a phase of deindustrialization. The nuclear industries of steel, textiles, rubber, footwear and automobiles have declined and become increasingly incompetent in the global market. Reich believed that foreign nations that used an industrial policy such as Europe or Japan were more successful because their policy provided for economic adjustment, not the United States.

It therefore argues that the government should be directly involved in defining national industrial objectives and ensuring the objectives achieved. This idea of “free market forces” is called economic freedom. For economic freedom to work, there must be economic freedom. A free market and the protection of property rights are inevitable for economic freedom. You have the right, the goods and the services. These rights are devoted to the rule of law, property rights and contractual freedom. Economic freedom means the least degree of state interference and regulation imposed on the market. Low tariffs, the absence of a minimum wage and the slightest environmental restrictions on the private sector are all signs of economic freedom. It is essential that markets are fully open to foreign investment.

Economic freedom can be measured in a variety of ways. There are two main indices that measure it or try to measure it. The Heritage Foundation`s Economic Freedom Index and the Fraser Institute`s annual Freedom of the World Survey (IEF, 2014). Both use criteria such as government spending; Corporate taxes; Legal structure and property rights; Access to money freedom of international trade; rules for credit, work and the economy Inflation rates Import costs and regulated prices. In the opinion of many economists, these indices show a strong correlation between economic freedom and economic and social well-being.