Politics Essay Example | Topics and Well Written Essays - 2500 words

Politics - Essay Example International trade is a common policy of an open economy. This might come in goods and services trade or in shipping of capital to and from the country. International trade is one of the highly talked about macroeconomic policies of the governments in the world. Almost all the capitalist countries open their goods and services to trade especially with the creation of the international agencies such as World Trade Organization and the World Bank. Opening the country to the rest of the world also means having an ally in the form of aids in case of calamities or wars. Trade talks can be bilateral or multilateral. At the present, the vast of its international relation of Africa is through foreign aid. The continent has opened its door to foreign aids especially after its independence from Europe. â€Å"Overseas development aid has played a much greater role in Africa than in any other part of the world† (Mkandawire). This paper wishes to trace if the existence of a trade deficit (having higher imports than exports) influenced the conduct of macroeconomic policies in African countries such as Tanzania. If so, in what ways has the deficit influenced macroeconomic policies? â€Å"In the broadest sense, macroeconomic policy is directly concerned with the aims of growth, distribution and sustainability that have been recognised as overriding national objectives† (National Development Strategy). â€Å"It is a tool for changing the economic positions of countries in the wordl economy† (Wuyts). International trade is one of the most important macroeconomic decision of a country as it affects its exchange rate, the interest rate and other aspects of the economy. TheAfrican economies was tagged as â€Å"uncommonly open† because of a high ratio of trade relative to the Gross Domestic Product (Wuyts). In the year 2000, this number reached to more than 60% of the GDP in Sub-Saharan Africa. An important study then is to