Allen said trade barriers are most often imposed to protect a country's new industries and domestic producers. Problems arise when these trade barriers aren't lifted and exports from other countries are never allowed to enter that market. Other reasons for establishing trade barriers include a desire to protect the health of the people or the environment, or to be self-sufficient. Allen said the European Union imposed trade barriers they say will protect their people's health, such as bans on genetically-modified crops. Japan has barriers to foreign trade to protect its own rice crop from foreign competition.
Sanctions are another factor influencing trade.
Trade sanctions prohibit the export of goods to certain countries, and usually are imposed to meet foreign policy or national security goals. For example, the United States has trade sanctions against Cuba, but as long as some of the European Union countries trade with Cuba, our sanctions have little effect. Allen said free trade is a two-way street, requiring both imports and exports. Many countries limit imports to reduce competition with domestic production, but Allen said the economically-efficient companies and industries will make adjustments and survive free trade. American farmers sometimes say imported products are inferior and don't meet the same standards U.S. products must meet, Allen said.