Free Trade

Trade barriers often do not work Trade barriers often do not work. They often force consumers to pay higher prices than they should in order to protect domestic industries. Free trade means that the countries do not pass laws that block or limit trade. Many countries today join together to set up zones of free trade, with a few trading partners. The European Union (EU) is made up of European countries. It offers large markets to many businesses. Goods and workers can move free between countries.

In the 1990’s, the United States, Canada and Mexico signed the North American Free Trade Agreement (NAFTA). This agreement removed all trade barriers among the three countries. People who opposed NAFTA claimed that American workers would lose their jobs because U.S. companies would move to Mexico to take advantage of cheaper wages and fewer environmental and workers’ rights laws. The World Trade Organization (WTO) is an international body. It oversees trade among nations and helps countries that are trying to develop their economies.