Free trade one calls the free trade of goods (goods and services) between humans in different states. One thereupon one calls aligned economic policy free trade policy, the free trade an opposite policy as protectionism.

Theoretical reason

Major item foreign trade theory

Most foreign trade theories come to the result that free trade serves the welfare of a country more than protectionism. Is assumed in general free trade is of advantage for the national economy as a whole, not however necessarily for all individuals.

History

Since it was badly in old times with the possibilities of the taxation, one had to concentrate on the few existing. Therefore the authority at each bridge, the tariff easily raisable at each town-gate and passport was usually the most important national source of income. The consequence was strongly reduced trade.

18. Century

With the arising of the mercantilism in 18. Century got the protectionism a theoretical underbody.

Free trade period

Trip of the free trade period was the 1860 between England and France closed Cobden Chevalier contract. This planned kind in its V the most-favored nation treatment between the Contracting Parties. Due to the economic meaning of the Contracting Parties looked for ever more states entrance in particular at the French market. The result was a network at free trade contracts, which develop all on the principle of the most-favored nation treatment. Up to Russia and the USA all important states took part in this network. The free trade network came starting from 1878 by cheap grain imported goods made of Russia and the USA under pressure, which led also to isolated economic wars, came however only with the breaking out of the First World War, and thus not primarily from economic reasons to case.

Intermediate wartime

The introduction of new, additional borders in formerly Austrian, osmanischen and Russian areas brought there economic entwinements also established to succumbing.

In the measure, in which intermediate wartime was coined/shaped by mutual distrust, also the international trade one limited. The world economic crisis of 1929 (black Friday) scooped, when it had once broken out, a part of its dynamics from the fact that the countries, stimulated of the economic collapse, closed panisch their borders for foreign products, and so with the smashing of the international trade also the economy again under pressure set.

After the Second World War

After the war again more strongly on an open foreign trade policy one set. This was shaken in the meantime by the collapse of the Bretton of Woods system and the developed for foreign trade zones such as EEC, EFTA and ASEAN.Mit of the UN subsidiary organization HOLE (today World Trade Organization) received the efforts around free trade a high-ranking institution.

Globalization

The complete liberalisation of the world trade would realize 250 billion euro at additional incomes annually according to a study of the World Bank (2005) up to the year 2015. The progressive free trade policy was a basis of the globalization. In the last years with the globalization critics a loud reaction developed, which refers to the danger of exploitation and cementing of existing downward gradients as well as undermining the economic policy of the national states.

Politics of the European Union and the USA

Critics accuse to the European Union and the USA to publicise free trade to pursue but frequently a protectionist foreign trade policy. As proof the following examples are stated:

• In the textile controversy 2005 between the People's Republic China on side and the European Union and the USA on the other side the European Union and the USA pushed the People's Republic of China in addition to insert export quotas into China for textiles from China than replacement for import ratios in the European Union (and the USA) for evenly these textiles from China. This happened already few months, after import restrictions for such textiles from China were waived for the beginning of the yearly 2005.

• States of the third world endorse a free trade for agricultural products. The European Union and the USA endorse (officially) a general free trade, since they can manufacture manufactured products particularly favorably. However farmers in the USA and in the European Union receive farm subsidies, which lead to the fact that despite higher production costs for agricultural products in the industrialized countries in relation to production costs for agricultural products in the developing countries the market prices first are smaller than the market prices of the latters. This has among other things as a consequence that the market chances for agricultural products from the developing countries are clearly smaller, than they would be with general free trade without subsidies.

See also

• Free trade agreement
• Foreign trade zone
• Bilateralism
• Manchester liberalism
• External trade
• Neoliberalismus

Articles in category "Free trade"

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