Free Trade

Although most countries officially favour freer trade and deny protectionism, the achievement of this goal is somewhat difficult, even among highly industrialized countries. Since World War II the leading trading nations have generally made a concerted effort to promote freer trade and remove protection barriers. When economies are booming and jobs seem secure, most people tend to support free trade. When recessions occur, however, many nations become more protectionist because of national interest and pressure from organized labour and other interest groups that are adversely affected by prolonged recessions.

The integration of the world's economies has proceeded so far that domestic economic policies now have distinct international effects. This has raised new arguments in favour of protection on the grounds that the economic policies of some foreign nations are unfair. Rules governing trade under the auspices of the General Agreement on Tariffs and Trade did not cover domestic policies, but the World Trade Organization theoretically has the power to decide disputes between trading nations.