What does free trade mean?

Definitions for free trade
free trade

This dictionary definitions page includes all the possible meanings, example usage and translations of the word free trade.

Princeton's WordNet

  1. free tradenoun

    international trade free of government interference

Wiktionary

  1. free tradenoun

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

Wikipedia

  1. Free trade

    Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold economically liberal positions, while 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, creates a protectionist barrier between that free trade area and the rest of the world. Most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. 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 and economic historians contend that current levels of trade openness are the highest they have ever been.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 while free trade and the reduction of trade barriers has 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.

ChatGPT

  1. free trade

    Free trade is an economic policy that allows unrestricted import and export of goods and services between different countries. Under free trade, goods are traded without tariffs or quotas, and traders are allowed to do business across international borders without government intervention. This policy promotes global economic growth, encourages competition, and can lead to price stability. It is based on the principle of comparative advantage, which suggests that each country should concentrate on producing goods that they can make most efficiently, and import goods that other countries can provide more efficiently.

Wikidata

  1. Free trade

    Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs or subsidies or quotas. 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 emerge from the equilibration of 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 among trading countries are determined by price strategies that may differ from those that would emerge under deregulation. These governed prices are the result of government intervention in the market through price adjustments or supply restrictions, including protectionist policies. Such government interventions can increase as well as decrease the cost of goods and services to both consumers and producers. Since the mid-20th century, nations have increasingly reduced tariff barriers and currency restrictions on international trade. Other barriers, however, that may be equally effective in hindering trade include import quotas, taxes, and diverse means of subsidizing domestic industries. Interventions include subsidies, taxes and tariffs, non-tariff barriers, such as regulatory legislation and import quotas, and even inter-government managed trade agreements such as the North American Free Trade Agreement and Central America Free Trade Agreement and any governmental market intervention resulting in artificial prices.

The Nuttall Encyclopedia

  1. Free Trade

    the name given to the commercial policy of England, first elaborately set forth with cogent reasoning by Adam Smith in his "Wealth of Nations," and of which the repeal of the Corn Laws in 1846 was the first step towards its adoption. Strictly used, the term is applicable only to international or foreign trade, and signifies a policy of strict non-intervention in the free competition of foreign goods with home goods in the home markets. Differential duties, artificial encouragements (e. g. bounties, drawbacks), to the home producer, all of which are characteristic of a protective system of trading, are withheld, the belief being entertained by free-traders that the industrial interests of a country are best served by permitting the capital to flow into those channels of trade into which the character and resources of the country naturally dispose it to do, and also by bringing the consumer as near as possible to the cheapest producer. But it is not considered a violation of the Free Trade principles to impose a duty for revenue purposes on such imported articles as have no home competitor, e. g. tea.

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Numerology

  1. Chaldean Numerology

    The numerical value of free trade in Chaldean Numerology is: 9

  2. Pythagorean Numerology

    The numerical value of free trade in Pythagorean Numerology is: 1

Examples of free trade in a Sentence

  1. Treasury Secretary Steve Mnuchin:

    This is an exaggeration, the president has been clear ... he has concerns about the WTO, he thinks there's aspects of it that are not fair, he thinks that China and others have used it to their own advantage, but we are focused on free trade. That's what we're focused on - breaking down barriers.

  2. Matthew Griffin:

    The U.S. backed with a free trade agreement to give those small businesses a competitive advantage, and it’s working. We are seeing the end of the FARC rebellion in Colombia after 50-something years and it’s mainly because of business and trade.

  3. Donald Duncan:

    In 1997 we were the fastest growing manufacturing metro area in the country and four years later it collapsed, what you can see on the ground today is 3,000 job openings. China's emergence as the world's low-cost producer and export superpower following its World Trade Organization entry in 2001 dealt a heavy blow to traditional industrial communities such as Hickory. Economists David Autor, David Dorn and Gordon Hanson have tried to separate the impact of trade from other factors affecting U.S. manufacturing employment and they estimate that between 1990 and 2007 Hickory lost 16 percent of its manufacturing jobs just due to surging imports from China. DEEP SCARS. Buffeted by other headwinds, such as the 1994 North American Free Trade agreement and the lifting of textile quotas in 2004, the area lost 40,000 manufacturing jobs overall, half the total, between 2000 and 2009. Nationally, more than 5 million manufacturing jobs have disappeared since 2000, a period that also included the worst economic downturn since the Great Depression. The collapse left deep and still visible scars that help explain the appeal of Trump's pledge to bring back manufacturing's glory days. In Hickory, disability rolls soared more than 50 percent between 2000 and 2014, swollen by older workers who struggled to return to the workforce. At the same time, the share of the 25-34 year old in the population fell by almost a fifth between 2000 and 2010. Consequently, even as the unemployment rate tumbled from a peak above 15 percent in 2010 to 4.6 percent today, below the national average, so did the labor force participation rate. It fell from above 68 percent in 2000 to below 59 percent in 2014. Poverty levels doubled. Yet the manufacturing upswing in areas that suffered the most during the downturn is evident. Rust belt states, such as Michigan, Indiana and Ohio that may prove pivotal in the Nov. 8 presidential election, have been adding manufacturing jobs faster than the economy as a whole. Michigan, for example, which lost nearly half of its manufacturing jobs between 2000 and 2009, has since then seen a 25 percent rise, well above the 4 percent gain nationally. Manufacturing employment there is still well below the levels in the 1990s. Economists debate whether returning to that level is realistic given technological advances that have reduced manufacturing's share of the workforce from a high of above 30 percent in the 1950s to around 8 percent today. But they also feel that have already seen the bottom, particularly when it comes to China's impact.

  4. Bernardo Bortolotti:

    They still have $6 trillion-plus to deploy but we have a structural break in the accumulation of assets, we are at a turning point ... Unless Asia can create an area of regional free trade to replace the intercontinental flows then the same issues that are emerging now in the Gulf could also emerge in Asia.

  5. Larry Kudlow:

    President Trump is essentially doing what John McCain wanted John McCain to do with respect to free trade, president Trump made it clear, time and again, in those two days outside of Quebec that President Trump wants to reinstitute a process of free trade, no tariffs, no tariff barriers, no quotas and subsidies.


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"free trade." Definitions.net. STANDS4 LLC, 2025. Web. 6 Jan. 2025. <https://www.definitions.net/definition/free+trade>.

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