Trade liberalization

Trade liberalization is the reduction or removal of government barriers to international trade, such as tariffs, quotas, and licensing restrictions.

Tariff: A tax imposed on imported or exported goods. Reducing tariffs is a direct way governments liberalize trade.
Comparative advantage: The principle that gains from trade can arise when countries specialize in goods with lower relative opportunity costs. It explains why specialization can raise total output after barriers fall.
Cobden–Chevalier Treaty: A 1860 commercial treaty between Britain and France that reduced tariffs and encouraged further European trade agreements. It became an influential early example of negotiated tariff reduction.
Protectionism: Government policies that shield domestic producers from foreign competition through trade barriers or related measures. It uses restrictions where liberalization seeks to reduce them.
Import quota: A government limit on the quantity or value of goods that may be imported. Removing quotas allows imports to expand beyond a fixed ceiling.
Consumer surplus: The difference between what consumers are willing to pay and what they actually pay. Cheaper imports can increase the gains consumers receive from trade.
General Agreement on Tariffs and Trade: A 1947 multilateral agreement that established rules and successive negotiations to reduce trade barriers. It organized postwar tariff-cutting negotiations before a permanent trade organization existed.
Autarky: An economic policy or condition in which a country aims to rely on domestic production rather than international trade. It represents a far more restrictive alternative to opening markets.
Free trade agreement: A treaty in which participants reduce or eliminate trade barriers among themselves. Such agreements liberalize trade among their members while setting shared rules.
Trade adjustment assistance: Public support for workers or firms harmed by increased import competition. It addresses concentrated losses that can follow broader market access.

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