English2 (Global

issues)

2- Free trade

Free trade is the economic policy of not discriminating against imports from and exports to foreign
jurisdictions. Buyers and sellers from separate economies may voluntarily trade without the domestic
government applying tariffs, quotas, subsidies or prohibitions on their goods and services. Free trade is the
opposite of trade protectionism or economic isolationism.

Politically, a free trade policy may just be the absence of any other trade policies; the government need not
positively do anything to promote free trade. This is one reason it is sometimes referred to as “laissez-faire
trade” or “trade liberalization.” Governments with free trade agreements (FTAs) do not necessarily abandon
all control of taxation of imports and exports. In modern international trade, very few so-called FTAs
actually fit the textbook definition of free trade.

In a free trade regime, both economies can experience faster growth rates. This is no different than voluntary
trade between neighbors, towns or states. Free trade enables domestic workers to concentrate those goods
and services where they have a distinct comparative advantage, a benefit widely popularized by economist
David Ricardo in his 1817 book “On the Principles of Political Economy and Taxation.” By expanding the
economy’s diversity of products, knowledge and skills, free trade also encourages specialization and the
division of labor.

Very few issues separate economists from the general public like free trade. Research suggests faculty
economists at American universities are seven times more likely to support free trade policies than everyone
else. As American economist Milton Friedman once explained, “the economics profession has been almost
unanimous on the subject of the desirability of free trade.” Despite this, experts have largely been
unsuccessful in efforts to promote free trade policies.

The United States does not have genuine free trade with other countries, even those countries with which it
has an FTA. Many politicians oppose free trade on the basis that certain sectors, such as the U.S.
manufacturing sector, may suffer if allowed to compete with foreign producers. Even though consumers face
higher prices and fewer choices under protectionist policies, movements to “buy American” typically
generate widespread support.

Non-American sellers face barriers to entry and tariffs on imports, and must compete with subsidies for U.S.
exports. As of 2016, special interest groups have successfully lobbied to impose trade restrictions on
hundreds of foreign products including steel, sugar, automobiles, brooms, milk, tuna, chicken, beef and
denim garments.

The U.S. government and the World Trade Organization (WTO) publicly support greater cross-border trade
in financial markets, including financial services. However, textbook free trade does not exist there either.
There are many supranational regulatory organizations for financial markets, such as the Basel Committee
on Banking Supervision, the International Organization of Securities Commission and the Committee on
Capital Movements and Invisible Transactions. Increased access to foreign financial markets provides U.S.
investors with a wider range of securities, currencies and other financial products.

http://www.investopedia.com/terms/f/free-trade.asp
1-Match each paragraph with the corresponding heading

Paragraph Heading
Free Trade Agreements and Financial Markets
Free Trade and the United States
Economics of Free Trade
Breaking down 'Free Trade'
What does ‘free trade’ mean?

2-Find in the text words that are similar in meaning to:

Intentionally
Boost
Allows
Reveals
Popular
Control
International

3-Answer these questions using your own words

a- What is trade protectionism?

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b- Why do so many politicians show a hostile attitude towards free trade agreements?

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4-Translate the following paragraph into English

Le libre-échange correspond à une politique économique qui entre dans le domaine du commerce
international. Il s'agit de supprimer les restrictions douanières (principalement les taxes) afin de laisser place
à la libre circulation des biens et services entre les pays sans intervention des gouvernements.

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5-Write an opinion paragraph

Do you think free trade agreements are good for your country’s economy?