Free Traders

Kendra Carswell

Trade Barriers

To improve their balance of payments and to protect businesses in certain domestic industries, nations sometimes impose trade barriers to limit imports.

Free Trade

Free trade is the unrestricted purchase and sale of goods and services between countries without the imposition of constraints such as tariffs, duties and quotas.

Free Trade Organizations

-NAFTA promotes more free trade between the U.S., Mexico and Canada.

- ASEAN promotes free trade between some Southeast Asian nations.

- EU promotes free trade between some European countries (euro).

Trade Barriers

-Tariff is a tax on imports that increases the cost of foreign goods to encourage purchase of domestic goods. Quota is a quantity limit on imports to limit the amount of foreign goods entering a country and encourage purchase of domestic goods.

-Embargo is a total ban on trade with a country or countries, usually done for political reasons ( we HAD one with Cuba until recently).

-Standard is a test that imports must pass to enter a country, it improves quality of foreign goods shipped into other countries.

-Subsidy is a financial “gift” given to domestic industries by the government to make their prices lower than prices of imports to encourage purchase of domestic goods.



Infant industries need to be protected from foreign competition until they become established.

International trade needs to be limited/restricted to “protect” domestic jobs, trade balance and value of money.

In times of war we should be able to produce our own instead of being too dependent on other countries.