International Trade & Institutions
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... Is Free Trade Fair? Discuss To start with, it is important to understand what free trade is. Free trade is defined as a system of trade policy which allows the traders to spread their trade across national frontiers without any intervention from the government of the land. Under free trade, prices are a true indicator of supply and demand and thus the sole determinants of resource allocation (Sirota, 2008). The interventions are in the form of taxes, tariffs, non-tariff barriers, and subsidies, and the inter-government managed trade pacts like the North American Free Trade Agreement (NAFTA) and Central America Free Trade Agreement (CAFTA) to name a few. Whether or not free trade is fair is a concept ...