Free trade

Free trade is an international trade policy that minimizes or removes government restrictions on imports and exports, such as tariffs and quotas.

Comparative advantage: The ability to produce a good at lower opportunity cost than another producer. It supplies the classic economic rationale for specializing and trading across borders.
Protectionism: Government policies that shield domestic producers from foreign competition. It uses barriers that free-trade policy seeks to reduce or remove.
Adam Smith: A Scottish moral philosopher and political economist whose work helped establish classical economics. His critique of mercantilism helped make open exchange a central economic argument.
World Trade Organization: An international organization that administers trade agreements and provides a forum for trade negotiations and disputes. It sets multilateral rules that constrain members' trade policies.
Consumer surplus: The difference between what consumers are willing to pay and what they actually pay. Lower import prices can increase the gains consumers receive from purchases.
Tariff: A tax imposed on goods as they cross a national border. Removing tariffs directly lowers the price wedge between domestic and imported goods.
Autarky: An economic condition in which a country seeks to rely on domestic production rather than international trade. It represents a more radical retreat from cross-border exchange.
David Ricardo: A British political economist who developed the theory of comparative advantage. His trade model explains why countries can benefit from exchange even when one is more productive in every good.
General Agreement on Tariffs and Trade: A postwar agreement that established rules and negotiation rounds for reducing barriers to international trade. It provided the framework for successive rounds of tariff reductions before the WTO.
Deadweight loss: A loss of total economic surplus caused by a market distortion that prevents mutually beneficial exchanges. Trade barriers can prevent trades that would benefit buyers and sellers.

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