How do trade agreements of international organizations affect trade? by encouraging the development of trade policies by eliminating tariffs and taxes on imports and exports by encouraging countries to balance imports and exports by smaller countries compete in the world market

The correct answer is “by eliminating tariffs and taxes on imports and exports”. Indeed, the first option about encouraging the development of trade policies is too vague and generic. The more specific answer is how trade policies are encouraged by eliminating tariffs and taxes on imports and exports. One of the tenets of neoliberalism is that “free and fair” competition between countries and industries is ensured by removing taxes and tariffs that will render their products more or less expensive arbitrarily, independent of their intrinsic value and actually more contingent upon the fiscal policies of the territories they are imported from or exported to. In other words, a PlayStation console that is manufactured in Japan should not be rendered more expensive due to taxes and tariffs that will push away potential buyers and that “artificially” increase its price. According to this policy the only acceptable overcharge would be the benefit margin for the manufacturer and the other intermediaries but no taxes or tariffs should be added upon that. However, trade agreements  cover a wide range of policies that are said to incentivize trade, not just tariffs and taxes.

The correct answer is:

C. by encouraging countries to balance imports and exports

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