Free International Trade (Leaving Cert Business): Revision Notes
📚 Revision Notes
Free International Trade
infoNote
Free trade refers to the unrestricted exchange of goods, services, and capital across international borders without the imposition of tariffs, quotas, or other barriers.
Free Trade: Definitions
The following are important definitions for understanding free trade:
- Open Economy: An economy that engages in international trade through importing and exporting goods and services.
- Trading Bloc: A group of countries that allow free trade among themselves, eliminating tariffs and trade barriers.
- Free Trade Area: An agreement where countries reduce or eliminate tariffs and barriers on trade between each other, allowing goods to move freely.
- Customs Union: An agreement where countries trade freely among themselves and adopt a common external tariff on imports from non-member countries.
- Common Market: A step towards economic integration where member countries remove trade barriers, harmonise economic policies, and allow free movement of goods, services, capital, and labour.
The European Union is an example of a single market and a customs union. Member States can trade freely with each other without any restrictions.