Free trade is a free market policy followed by some international markets in which countries' governments do not restrict imports from, or exports to, other countries. In government, free trade is predominately advocated by political parties that hold right-wing economic positions, while economically left-wing political parties generally support protectionism.
Most nations are today members of the World Trade Organization (WTO) multilateral trade agreements. Free trade is additionally exemplified by the European Economic Area and the Mercosur, which have established open markets. However, most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. Other barriers that may hinder trade include import quotas, taxes and non-tariff barriers, such as regulatory legislation.
There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth. However, liberalization of trade can cause significant and unequally distributed losses, and the economic dislocation of workers in import-competing sectors.
This article uses material from the Wikipedia article "Free trade" as of 29 Jul 2018, which is released under the Creative Commons Attribution-Share-Alike License 3.0.