Free Trade And The Trade

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Free trade is a policy that is followed by international markets in which those countries governments do not restrict imports or exports. Free trade generally includes the trade of goods without taxes or tariffs, free access to markets, trade agreements, and the inability to interfere with markets through a government enacted monopoly or oligopoly power. This paper will look at how free trade came about and the unequal benefit between nations in the system of free trade. Figure 1 shows the transition to free trade, before free trade came about there was trade barriers between countries. Following that there was treaties and agreements between countries that started to weaken the trade barriers before they disappeared. The trade…show more content…
In the next box we see treaties that reduce trade barriers. Along with those treaties there is trade liberalization due to the MFN and other institutions. The last thing we see in the second box is trade liberalization expansion also due to the MFN. All of this lead to the development of the Multilateral Recognition Arrangements (MLA) the purpose of the MLA, is to promise joint credit of accredited certification amongst parties to the MLA, and then support of qualified certification in several markets created on only one certification. In short it adds to the freedom of world trade by removing technical barriers to free trade. Some historical examples of the transition into free trade would be the change from mercantilism to the 19th century free trade system. It started Britain’s unilateral liberalization including the abolition of the corn-law, the Cobden-Chevalier treaty, and the Imperial preference in 1935. An example of the MFN would be the Jay Treaty in 1794, the United States gave the "most favored nation" trading position to Britain. Along with the Jay Treaty the World Trade Organization that was created in 1994, requires members to grant one another "most favored nation" status. The expansion of free trade started in Britain. In the U.K. free trade developed into an essential belief practiced by the 1840s. Thanks to the Treaty of Nanking, China then opened five treaty ports to world trade around 1843. The
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