free trade

(noun)

International trade free from government interference, especially trade free from tariffs or duties on imports.

Related Terms

Examples of free trade in the following topics:

  • The Asia-Pacific Economic Cooperation

    • APEC is a forum for 21 Pacific Rim countries that seeks to promote free trade and economic cooperation throughout the Asia-Pacific region.
    • APEC is considering the prospects and options for a Free Trade Area of the Asia-Pacific (FTAAP), which would include all APEC member economies.
    • Since 2006, the APEC Business Advisory Council, promoting the theory that a free trade area has the best chance of converging the member nations and ensuring stable economic growth under free trade, has lobbied for the creation of a high-level task force to study and develop a plan for a free trade area.
    • There are approximately 60 free trade agreements, with an additional 117 in the process of negotiation in Southeast Asia and the Asia-Pacific region.
    • Explain the role The Asia-Pacific Economic Cooperation (APEC ) plays in ensuring free trade

  • The North American Free Trade Agreement (NAFTA)

    • The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.
    • It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada.
    • In terms of combined GDP of its members, the trade bloc is the largest in the world as of 2010.
    • --Canada trade was already duty free.
    • NAFTA has allowed agricultural goods such as eggs, corn, and meats to be tariff-free.

  • Trading blocs and agreements

    • The North American Free Trade Agreement (NAFTA) further boosts export sales by enabling companies to sell goods at lower prices because of reduced tariffs.
    • Regional trading blocs represent a group of nations that join together and formally agree to reduce trade barriers among themselves.
    • Such agreements are designed to facilitate trade through the establishment of a free trade area customs union or customs market.
    • Free trade areas and customs unions eliminate trade barriers between member countries while maintaining trade barriers with nonmember countries.
    • A common market provides for harmonious fiscal and monetary policies while free trade areas and customs unions do not.

  • Absolute Advantage and the Balance of Trade

    • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations.
    • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations .
    • A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap.
    • The balance of trade is sometimes divided into a goods and a services balance.
    • The European Free Trade Agreement has helped countries international trade without worrying about absolute advantage and increases net exports.

  • Ethical Barriers

    • Despite international trading laws and declarations, countries continue to face challenges around ethical trading and business practices.
    • International trade is the exchange of goods and services across national borders.
    • Other common targets of anti-corporate and anti-globalization movements include the Organisation for Economic Co-operation and Development (OECD), the WTO, and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Multilateral Agreement on Investment (MAI), and the General Agreement on Trade in Services (GATS).
    • This event came to symbolize the increased debate and growing conflict around the ethical questions on international trade, globalization and capitalization .
    • Explain how and why groups place ethical barriers on international trade

  • Tariffs, expropriation, and the technological environment

    • Most nations encourage free trade by inviting firms to invest and to conduct business there, while encouraging domestic firms to engage in overseas business.
    • There are, however, some governments that openly oppose free trade.
    • Therefore, they restrict trade with non-Communist nations.
    • The most common form of restriction of trade is the tariff, a tax placed on imported goods.

  • Common Markets

    • A common market is the first stage towards a single market and may be limited initially to a free trade area.
    • A common market is a first stage towards a single market and may be limited initially to a free trade area with relatively free movement of capital and of services, but not so advanced in reduction of the rest of the trade barriers.
    • The six states that founded the EEC and the other two communities were known as the "inner six" (the "outer seven" were those countries who formed the European Free Trade Association).

  • Economics

    • Trade barriers are government-induced restrictions on international trade.
    • Most trade barriers work on the same principle–the imposition of some sort of cost on trade that raises the price of the traded products.
    • If two or more nations repeatedly use trade barriers against each other, then a trade war results.
    • In theory, free trade involves the removal of all such barriers, except perhaps those considered necessary for health or national security.
    • In practice, however, even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel.

  • The Argument Against Barriers

    • Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products.
    • If two or more nations repeatedly use trade barriers against each other, then a trade war results
    • In theory, free trade involves the removal of all such barriers, except perhaps those considered necessary for health or national security.
    • In practice, however, even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel.
    • If international trade is economically enriching, imposing barriers to such exchanges will prevent the nation from fully realizing the economic gains from trade and must reduce welfare.

  • Exporting

    • In international trade, exporting refers to selling goods and services produced in the home country to other markets.
    • The advent of small trades over the internet such as through Amazon and eBay has largely bypassed the involvement of customs in many countries because of the low individual values of these trades.
    • Data on international trade in goods is mostly obtained through declarations to customs services.
    • If a country applies the general trade system, all goods entering or leaving the country are recorded.
    • If the special trade system (e.g., extra-EU trade statistics) is applied, goods which are received into customs warehouses are not recorded in external trade statistics unless they subsequently go into free circulation in the country of receipt.