What Is The Concept Of "Free Trade"?


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Sudipa Sarkar answered
Free Trade is characterized by such a government policy if implemented; there will not be any such government discrimination in imports and interference in export market as well. Though this doesn't mean that this will be beyond government interference, rather, if it is such way implemented, it will enhance international trade by the virtue of avoiding the tariff barriers, currency restrictions, and import quotas. This is based on the theory of Adam Smith who established through his theory that division of labour among countries lead to specialization, more efficiency, and thus more productive output in the international market setting.

While discussing the concept of free trade, we should know free trade area as well, which implies a region with minimum obstacles in unrestricted trade. So it is quite evident that the free trade area is an outcome of free trade agreement. The aim of free trade is to analyze and refrain barrier in order to customize easy exchange of specialized and skilled labour force and division of labour, resulting enhanced development.

The concept of free trade is an interrelated factor to the aspect of globalization. Therefore, quite obviously, it is also one of the most controversial topics of 20th and 21st centuries focusing on economical, societal and moral issues and its impact in upcoming times both in positive and negative frameworks.

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