Free Trade Day 2023: Free Trade Day is annually observed on May 8. Free trade is a trade policy in which neither imports nor exports are restricted. You can also consider it the concept of a free market in the context of international commerce. It is primarily supported by political parties with an economic libertarian ideology. Left-wing parties and economic nationalists advocate for protectionism.
Protectionism is the economic policy of limiting imports from other nations through tariffs, quotas, trade barriers, and other government regulations. The majority of governments continue to implement some of these protectionist measures to support local employment.
The Background of Free Trade Day
In its earliest iteration, the concept of a free trade system among multiple states dates back to the 16th century. The Spanish theologian Francisco de Vitoria wrote them. Adam Smith and David Ricardo were two British economists who developed the modern concept of free commerce. Economists who advocated for free trade believed that it was the reason why Egypt and China prospered economically. This topic has been the subject of debate for centuries.
In 1775, the British Parliament issued the Prohibitory Act, which blockaded colonial ports during the American Revolution. In response, the Second Continental Congress declared economic independence. This meant that on April 6, 1776, American ports were opened to foreign trade. After three months, they declared their independence. According to economic historian Paul Bairoch, this period of unrestricted trade did not last long. Since the end of the eighteenth century, he asserts, the United States has been “the homeland and bastion of modern protectionism.”
During the Civil War in the 19th century, northern merchants sought to secure their trade from southern competition by imposing high tariffs. To export cotton, the South opted for liberal trade policies. The Reciprocal Trade Agreements Act of 1934 initiated the liberalisation of international trade. After World War II, the United States has frequently advocated for tariff reductions and free commerce. They contributed to the formation of both the General Agreement on Tariffs and Trade and the World Trade Organisation. Since that time, the United States has negotiated several managed-trade agreements. The Israel–United States Free Trade Agreement was signed in 1985, and the Dominican Republic–Central America Free Trade Agreement was signed in 2006.
Currently, the majority of nations are members of the World Trade Organisation. It restricts, but does not eliminate, trade barriers and regional free trade zones, which reduce trade barriers among members. In 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership entered into force, comprising eleven Pacific Ocean bordering nations.
HOW TO OBSERVE DAY OF FREE TRADE
Explore the subject of free commerce
If this article piqued your interest and you wish to learn more, there are numerous theory books on the subject. Additionally, you can search for opinion articles on economic news websites.
Talk about unfettered trade with others
If they are aware, start a conversation on social media or in person with your peers and family. Consider both the positive and negative aspects of the system. This is the key to every productive discussion.
Watch a debate between specialists
There are numerous ancient and new debates between economists regarding the topic on YouTube. Again, the best way to see this is to evaluate the strong arguments made by each participant and disregard videos or comments claiming that one participant “won” the debate.
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Five essential facts about free trade
The genesis of Free Trade Day
Dr. Tom Stevens, the originator of the Objectivist Party, conceived of Free Trade Day.
Friedrich Hayek’s birthday is May 8.
Friedrich Hayek was an Austrian economist and proponent of free trade, so the date for Free Trade Day was chosen in his honour.
Trade openness is at an all-time high right now.
According to economists and economic historians such as Federico Giovanni and Antonio Tena-Junguito, this is the case.
Generally speaking, economists favour free commerce.
Free trade and the elimination of trade barriers appear to have a positive impact on economic growth, according to their general agreement.
Advantages of free commerce
Free commerce benefits the citizens of participating nations by allowing them to purchase goods at lower prices and of higher quality.
WHY DAY OF FREE TRADE IS IMPORTANT
It is a day for economic education.
Whether you support free trade or not, it is beneficial for everyone to be aware of it. Understanding the pros and cons can bring you one step closer to your ideal economic system, even if you don’t concur with it.
It demonstrates the effects of free commerce
Adopting aspects of free trade allowed for the formation of the World Trade Organisation. Even if a proposed system is not entirely implemented, years of discussion and deliberation can result in the world adopting elements of it.
It enables us to comprehend the world a bit better.
What is a decentralised market? What type of individuals support it? What are the ramifications of governments embracing it or portions of it? These are the types of queries we can answer after conducting extensive research.
FREE TRADE DAY DATES