Free Trade
Free trade may also be called International Trade.
Free Trade occurs when goods and services are traded between countries without the use of import controls. For most of the late twentieth century, the prevailing wisdom has been that free trade can lead to improvements in economic welfare in the global economy. However this has not prevented regular trade disputes between countries - often when one country feels that unfair trade practices have caused the benefits from trade to become distorted. Free trade is very important to all developed countries as there are likely to be economies of scale - when producing for larger markets (foreign markets), average costs of production will be lower. There is likely to be a wider choice of products for consumers to buy and prices are likely to be lower because of lower costs. There is likely to be more efficient use of resources because countries will specialise in producing goods and services where opportunity cost is lowest, i.e. countries will produce goods and services that they can make more efficiently. There is likely to be an increased global output of goods and services without using more inputs. Another reason for importance is there is likely to be a higher standard of living for consumers. There may be political benefits because dealing with other countries will improve relationships.

Maquiladoras (Mexican factories which take in imported raw materials and produce goods for export) have become the landmark of trade in Mexico. These are plants that moved to this region from the United States, hence the debate over the loss of American jobs. Hufbauer's (2005) book shows that income in the maquiladora sector has increased 15.5% since the implementation of NAFTA in 1994. Other sectors now benefit from the free trade agreement, and the share of exports from non-border states has increased in the last