Free Trade

Free trade is aimed at reducing the barriers in an effort to facilitate the trade of goods and services that are not deterred by government-imposed restrictions. The trade of goods and services could happen between or within countries. Government-imposed restrictions increase costs to goods and services, producers, businesses, and customers. The restrictions may include tariffs such as taxes and tariffs, as well as non-tariff barriers, such as regulatory legislation and quotas.

Free trade is based on the theory of comparative advantage, which explains how trade will benefit both parties if they have different opportunity costs of production. Samples of free trade include: trade of goods without taxes, free access to markets, free access to market information, the free movement of both labor and capital between and within countries.