Chapter 9: formulation of national trade policies: two principle issues have shaped the debate on appropriate trade policies, whether a national government should intervene to protect the country"s domestic. Free trade: implies that the national government exerts minimal in uence on the exporting and importing decisions of the private rms and individuals. 0: now supposed that the government in company a!s home country gives the rm a matrix (shows pro ts in subsidy, following would be payoff billions): It has induced company a to develop new technology. It has induced other country!s rm (company b) to stay out of the market. National trade policies: after assessing the needs of the national economy the government then adopts industry-by-industry policies to promote the country!s overall economic agenda. Economic development programs: international commerce can play a major role in economic development programs, countries that depend on a single export often choose to diversify their economies to reduce the impact.