Free trade is the policy of allowing goods and services to move across borders with minimal government-imposed barriers such as tariffs, quotas, or subsidies. It is grounded in the theory of comparative advantage and promoted globally by the WTO.
What Is Free Trade? Free trade is a policy in which governments do not restrict imports or exports — no tariffs, no quotas, no subsidies designed to favor domestic producers over foreign ones. Under free trade, goods and services flow across borders in response to market forces of supply and demand, allowing countries to specialize according to their comparative advantage and exchange the surplus for what they need. Key Takeaways Free trade means minimal government barriers to cross-border comme