- "Free trade is a trade policy that does not restrict imports or exports."
An economic policy that advocates for the unrestricted exchange of goods and services between countries.
Tariffs and Trade Barriers: Taxes and restrictions imposed by governments on imports and exports that protect domestic industries and limit international trade.
Mercantilism: An economic theory that emphasizes the accumulation of wealth through a favorable balance of trade, often through protectionist measures.
Comparative Advantage: The ability of one country or region to produce a good or service more efficiently than another, leading to specialization and exchange.
Ricardo's Theory of Comparative Advantage: The well-known economic theory that argues that countries should specialize in the production of goods where they have a comparative advantage, and trade with others to maximize overall welfare.
NAFTA and the EU: Trade blocs or free-trade agreements among countries that promote trade by reducing barriers and increasing investment opportunities.
General Agreement on Tariffs and Trade (GATT): An international treaty that aimed to regulate trade and reduce tariffs, leading to the birth of the World Trade Organization (WTO).
Protectionism: A set of policies that seek to restrict competition from imports or subsidize domestic industries through tariffs, quotas, and other measures.
Globalization: The increasing interdependence and integration of the world economy, resulting in the movement of goods, capital, and labor across borders.
Foreign Direct Investment (FDI): The investment by a company in foreign countries aimed to establish a presence beyond its domestic borders, as opposed to portfolio investment.
Offshoring and Outsourcing: The practice of relocating production or services to countries with lower costs, often resulting in the displacement of domestic workers.
Multinational Corporations (MNCs): Large companies that have operations in multiple countries, often taking advantage of trade policies to expand globally.
Income Inequality: The unequal distribution of wealth within a society, which may be exacerbated by free trade policies, leading to debates over redistribution and social welfare programs.
Labor Standards and Human Rights: The conditions in which people work, including child labor and forced labor, and the impact that trade policies can have on these issues.
Environmental Standards: The regulations in place to protect the environment, which may be weakened by competitive pressures from other countries.
Intellectual Property Rights: The legal protections afforded to creative products such as patents, trademarks, and copyrights, which can be affected by trade agreements.
Bilateral Free Trade: This type of free trade agreement is between two countries (or groups of countries) without including other nations.
Multilateral Free Trade: This agreement is among multiple nations who have agreed to remove barriers to trade amongst themselves. Examples of Multilateral agreements include WTO, NAFTA, EU among others.
Unilateral Free Trade: This type of free trade agreement is when one country decides to reduce trade barriers without expecting the other country to do the same.
Regional Free Trade: This type of free trade agreement is between a group of countries within a specific region, for example, the Asia-Pacific Economic Cooperation (APEC)/ African Continental Free Trade Area (AfCFTA).
Comprehensive Free Trade: This type of free trade agreement covers not only trade in goods and services, but also investment policies, intellectual property, and other economic issues.
Partial Free Trade: This type of free trade agreement covers only some aspects of trade, such as tariffs on specific products or industries.
Free Trade Zones: This is a special designated area within a country where the traditional trade barriers are not applicable, in order to promote international trade.
- "Free trade is predominantly advocated by political parties that hold economically liberal positions."
- "Economic nationalist and left-wing political parties generally support protectionism, the opposite of free trade."
- "Most nations are today members of the World Trade Organization multilateral trade agreements."
- "Free trade was best exemplified by the unilateral stance of Great Britain who reduced regulations and duties on imports and exports from the mid-nineteenth century to the 1920s."
- "An alternative approach, of creating free trade areas between groups of countries by agreement, such as that of the European Economic Area and the Mercosur open markets."
- "Most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports."
- "Other barriers that may hinder trade include import quotas, taxes, and non-tariff barriers, such as regulatory legislation."
- "Historically, openness to free trade substantially increased from 1815 to the outbreak of World War I."
- "Trade openness increased again during the 1920s but collapsed (in particular in Europe and North America) during the Great Depression."
- "Trade openness increased substantially again from the 1950s onwards (albeit with a slowdown during the 1973 oil crisis)."
- "Economists are generally supportive of free trade."
- "There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare."
- "Free trade and the reduction of trade barriers have a positive effect on economic growth and economic stability."
- "However, in the short run, liberalization of trade can cause significant and unequally distributed losses and the economic dislocation of workers in import-competing sectors."
- "Free trade is predominantly advocated by political parties that hold economically liberal positions."
- "Economic nationalist and left-wing political parties generally support protectionism, the opposite of free trade."
- "Most nations are today members of the World Trade Organization multilateral trade agreements."
- "Most governments still impose some protectionist policies that are intended to support local employment."
- "Other barriers that may hinder trade include import quotas, taxes, and non-tariff barriers."