free trade

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Free Trade

The state in which there are few or no tariffs or other trade barriers discouraging international trade. For example, a country with a free trade policy does not subsidize favored industries in order to make them less expensive compared to international competitors. Proponents of free trade argue that it is more economically efficient and helps consumers by promoting competition to keep prices low. Critics contend that free trade is detrimental to local jobs, especially in the developed world.

free trade

the EXPORT and IMPORT of goods and services between countries totally unhindered by restrictions such as TARIFFS and QUOTAS. In general, free trade leads to a higher level of economic welfare in so far as it favours the location of economic activities in those countries best suited to their production, resulting, through the trade mechanism, in worldwide consumption gains in the form of lower prices and greater product availability. See INTERNATIONAL TRADE, TRADE INTEGRATION, WORLD TRADE ORGANIZATION.

free trade

the INTERNATIONAL TRADE that takes place without barriers, such as TARIFFS, QUOTAS and FOREIGN EXCHANGE CONTROLS, being placed on the free movement of goods and services between countries. The aim of free trade is to secure the benefits of international SPECIALIZATION. Free trade as a policy objective of the international community has been fostered both generally by the WORLD TRADE ORGANIZATION and on a more limited regional basis by the establishment of various FREE TRADE AREAS, CUSTOM UNIONS and COMMON MARKETS.


References in periodicals archive ?
Import quotas and remaining tariffs are significant barriers that would be lifted under a free-trade agreement.
Others argue that a free-trade agreement is unnecessary given the presence of the General Agreement on Tariffs and Trade (GATT) and the Structural Impediments Initiative (SII).
Unlike the SII, which has become mired in technical details, such as how much public investment and how many sidewalks Japan should have, a free-trade agreement offers a more comprehensive format that would attract more attention from the general public.
A free-trade agreement would require Japan to hold keiretsu members accountable for anti-competitive activities that violate Japan's antitrust laws.
For example, a free-trade agreement would focus on the many building restrictions in Japan that keep new businesses from entering the market in major cities like Tokyo.
A free-trade agreement could work to remove these restrictions so that American firms have room to set up business in Japan.
A free-trade agreement could reduce the waiting time for large store applications even more, and pursue any additional steps necessary to make large retail stores more accessible.
Yeo said that a free-trade agreement with Japan would deepen bilateral ties, promote stability and prosperity in Southeast Asia and spur trade liberalization in the Asia-Pacific region.
Singapore is also studying the feasibility of free-trade agreements with New Zealand, Chile and South Korea.