Although countries are very diverse there are compelling reasons for selecting the
nation state as the basic unit for analysing sea trade. It is the obvious economic and
political unit with common policies, separated from other countries by their
currency. Government policy affects free trade, tariffs and even the participation in
trade. These policies can be very important. Many countries have restrictive trade
policies such as tariffs. In the fifteenth century the Chinese introduced laws
prohibiting sea trade. More recently the policies of the European Union (EU) have
had a significant impact on the size and direction of trade. There are many other
examples. Even if these reasons are not persuasive, the fact that most trade statistics
are collected by governments on a national basis is a practical reason why we
should analyse trade in this way.