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Simple English definitions for legal terms
free trade
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A quick definition of free trade:
Free trade means that countries can buy and sell things with each other without any rules or restrictions from their governments. This includes things like no taxes or barriers on goods and services, and everyone can access markets and information equally. The North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) are examples of agreements that try to make free trade a reality. The opposite of free trade is called protectionism, which means that countries try to protect their own businesses by making it harder for other countries to sell things in their markets.
A more thorough explanation:
Definition: Free trade is a policy that promotes international trade without any restrictions from governments. This means that goods and services can be traded without taxes or barriers, and there is no limit to access to markets and market information. The goal of free trade is to increase economic growth and create more opportunities for businesses and consumers.
Examples: The North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) are two examples of treaties that promote free trade. NAFTA is an agreement between the United States, Canada, and Mexico that eliminates tariffs and other trade barriers between the three countries. The WTO is an international organization that sets rules for global trade and resolves disputes between member countries.
Explanation: Free trade allows businesses to expand their markets and reach more customers around the world. By removing barriers to trade, businesses can import and export goods and services more easily, which can lead to lower prices for consumers and increased competition. The examples of NAFTA and the WTO show how countries can work together to promote free trade and create a more open and interconnected global economy.