Free trade
Free trade is trade between countries without barriers such as tariffs and quotas. The opposite is protectionism, the use of tariffs and quotas to limit trade.[1]
History
In 1846 the British Prime Minister Robert Peel repealed the Corn Laws, bringing free trade to England.[2] A tradition dating back to British policy in the second half of the nineteenth century holds that free trade benefits a country even if other countries keep their barriers.[3]
Near the end of the nineteenth century, as the United States and Germany grew stronger, the words fair trade and reciprocity became popular in Britain.[4] The idea of using tariffs to pressure other countries into lowering their barriers was known to the economists Adam Smith and Alfred Marshall, but both rejected it.[3] Marshall argued that Britain should be tolerant of other countries using tariffs to protect new industries.[5]
Free trade areas
"A free trade area and a customs union both remove tariffs between participating countries for goods produced within these countries."[6] One example is the European Free Trade Association. It was set up as a free trade area for industrial goods, at first between the United Kingdom, Norway, Sweden, Denmark, Austria, Switzerland and Portugal.[6]
"Within the European Union, there are no tariffs, no quotas, no trade subsidies, no capital controls, and no migration controls."[6] The Single European Act, signed in 1986, reduced non-tariff barriers in a number of areas.[7]
See also
References
- ↑ Dullien, Sebastian; Goodwin, Neva; Harris, Jonathan M.; Nelson, Julie A.; Roach, Brian; Torras, Mariano (2018). Macroeconomics in Context: A European Perspective. Routledge. p. 582. ISBN 9781138185180.
- ↑ Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 99. ISBN 9781400861590.
- ↑ 3.0 3.1 Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 13. ISBN 9781400861590.
- ↑ Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 16. ISBN 9781400861590.
- ↑ Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 17. ISBN 9781400861590.
- ↑ 6.0 6.1 6.2 Dullien, Sebastian; Goodwin, Neva; Harris, Jonathan M.; Nelson, Julie A.; Roach, Brian; Torras, Mariano (2018). Macroeconomics in Context: A European Perspective. Routledge. p. 458. ISBN 9781138185180.
- ↑ Dullien, Sebastian; Goodwin, Neva; Harris, Jonathan M.; Nelson, Julie A.; Roach, Brian; Torras, Mariano (2018). Macroeconomics in Context: A European Perspective. Routledge. p. 459. ISBN 9781138185180.