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Free tradealso called laissez-fairea policy by which a government does not discriminate against imports or interfere with exports by applying tariffs to imports or subsidies to exports. A free-trade policy does not necessarily imply, however, that a country abandons all control and taxation of imports and exports.
See comparative advantage. From the point of view of a single country there may be practical advantages in trade restriction, particularly if the country is the main buyer or seller of a commodity. In practice, however, the protection of local industries may prove advantageous only to a small minority of the population, and it could be disadvantageous to the rest. Since the midth 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.
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Concept illustration of the world showing trade relationships between countries. on This Topic. Opinion polls showed that the American people lacked confidence Learn More in these related Britannica articles: comparative advantage. Comparative advantageeconomic theory, first developed by 19th-century British economist David Ricardo, that attributed the cause and benefits of international trade to the differences in the relative opportunity costs costs in terms of other goods given up of producing the same commodities among countries.
Opinion polls showed that the American people lacked confidence in U. On issues of…. Local Indian traders were….
History at your fingertips. up here to see what happened On This Dayevery day in your inbox! address. Be on the lookout for your Britannica newsletter to get trusted stories delivered right to your inbox.Free trade is the ____.
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Regional Trade Agreements