Trade Policy

As the topic of Trade has been explained, Free Trade is a system of trade policy that allows traders to act and transact without interference from government. According to the law of comparative advantage the policy permits trading partners mutual gains from trade of goods and services.

Under a free trade policy, prices are a reflection of true supply and demand, and are the sole

determinant of resource allocation. Free trade differs from other forms of trade policy where the allocation of goods and services amongst trading countries are determined by artificial prices that may or may not reflect the true nature of supply and demand. These artificial prices are the result of protectionist trade policies, whereby governments intervene in the market through price adjustments and supply restrictions. Such government interventions can increase as well as decrease the cost of goods and services to both consumers and producers.

Here we review some guidelines to Islamic Trade laws gathered in a research done by the Shirazi Foundation. We have extracted this research from the books written by the experts in Shia Law and theological teachers which state;

“Ayatollah Sayid Sadiq Shirazi believes in order to prosper in a society; a governing system needs to be free of any affiliation to any government  party in which he believes that, “freedom is innate and fundamental to mankind. Liberation is the tangible material form of this originality. But where does the evidence of freedom lie? More precisely: where do we find liberation? To this very delicate and testing question, H.E Shirazi elaborates by giving examples including and not limited to:  freedom legislated by Islam including the freedom of establishing trade unions, the freedom, of selling, or buying, mortgage, security, invention,giving bonds, reconciliation, insurance, companies,transaction,agriculture,land ownership,deposits, property leases,renting and letting, or opening a shop , of taking a profession,  of creating industries and many more…. .”


Sayed Mohammad. Shirazi, “The Way to Muslim Revival”, pp 344-346

Free Trade, American Policy Source:

Gathered by:

Research Department of Shirazi Foundation

Washington D.C