ECONEMISIS.COM: Global Economy


	Returns To Scale
	In economics, returns to scale and economies of scale are terms that are related, and sometimes incorrectly used interchangeably. They describe what happens as the scale of...


	Natural Resource
	Natural resources are naturally occurring substances that are considered valuable in their relatively unmodified form. A commodity is generally considered a natural...


	Commodity
	The word commodity is a term with distinct meanings in business and in Marxian political economy. For the former, it is a largely homogeneous product, whereas for the latter, it...


	Trade Barrier
	A trade barrier is a general term that describes any government policy or regulation that restricts international trade, the barriers can take many forms, including: Import duties...


debt relief	NAFTA
	The North American Free Trade Agreement, known usually as NAFTA, is a free trade agreement among Canada, the United States, and Mexico. NAFTA went into effect on...


	EFTA
	The European Free Trade Association (EFTA) was established on May 3, 1960 as an alternative for European states that were not allowed or did not wish to join the European...


	European Union
	The European Union or the EU is an intergovernmental and supranational union of 25 democratic countries known as member states. The European Union was established...


	CSN
	The South American Community of Nations (CSN) (Spanish: Comunidad Sudamericana de Naciones) will be a continent-wide free trade zone that will unite two existing free-trade...

Trade Barrier

A trade barrier is a general term that describes any government policy or regulation that restricts international trade, the barriers can take many forms, including:

Import duties
Import licenses
Export licenses
Quotas
Tariffs
Subsidies

Non-tariff barriers to trade

Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products. If two or more nations repeatedly use trade barriers against each other, then a trade war results.

Economists generally agree that trade barriers are detrimental and decrease overall economic efficiency, this can be explained by the theory of comparative advantage. In theory, free trade involves the removal of all such barriers, except perhaps those considered necessary for health or national security. In practice, however, even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel. Examples of free trade areas are: North American Free Trade Agreement (NAFTA), European Free Trade Association, European Union (EU), South American Community of Nations.