Free trade came as a result of the American War of Independence that would become the United States. After the British Parliament passed the Prohibitory Act, which blocked colonial ports, the Continental Congress responded by effectively declaring economic independence and opening American ports to foreign trade on 6 April 1776. According to historian John W. Tyler, „trade was imposed on Americans, whether they like it or not.“ [35] Yet a certain level of protectionism is the global norm. Most developed nations maintain controversial agricultural tariffs. From 1820 to 1980, average tariffs on manufactured goods in twelve industrialized countries ranged from 11 to 32%. In developing countries, average tariffs on industrial products are about 34%. [52] American economist C. Fred Bergsten developed bicycle theory to describe trade policy. In this model, trade policy is dynamically unstable, constantly moving towards either liberalisation or protectionism. To prevent cycling from falling off the wheel (the disadvantages of protectionism), trade policy and multilateral trade negotiations must constantly move towards greater liberalization. To achieve greater liberalization, policymakers need to call for greater consumer and wider economic well-being over narrower interests. But Bergsten also believes that it is also necessary to compensate the losers of trade and help them find new jobs, as this will reduce both the reaction against globalisation and the motivations of trade unions and politicians to demand trade protection.

[53] In general, trade diversion means that a free trade agreement would divert trade from more efficient suppliers outside the zone to less efficient suppliers within the territories. Whereas the creation of trade implies the creation of a free trade area that might not otherwise have existed. In any case, the creation of trade will increase a country`s national well-being. [15] The arguments in favour of protectionism fall within the economic category (trade harms the economy or economic groups) or the moral category (the effects of trade could help the economy, but have negative effects in other areas). A general argument against free trade is that it represents colonialism or in disguise imperialism. The moral category is broad, including concern about:[58] [best source needed] Pro-free trade economists believed that trade was the reason why some civilizations prospered economically. Thus, Smith highlighted the intensification of trade as a reason to prosper not only for Mediterranean cultures such as Egypt, Greece and Rome, but also for Bengal (East India) and China. The great prosperity of the Netherlands, after having dered Spanish imperial domination and pursued a free trade policy,[32] made the free trade/mercantilist conflict the main economic issue for centuries. Free trade policy has been fought over the centuries with mercantilist, protectionist, isolationist, socialist, populist and other policies. A free trade agreement (FTA) or treaty is a multinational agreement under international law to create a free trade area between cooperating states.

Free trade agreements, a form of trade pacts, set tariffs and tariffs on imports and exports by countries, with the aim of reducing or removing barriers to trade and thereby promoting international trade. [1] These agreements „generally focus on a chapter with preferential tariff treatment,“ but they often contain „trade facilitation and regulatory clauses in areas such as investment, intellectual property, public procurement, technical standards, and health and plant health issues.“ [2] The value of free trade was first observed and documented in 1776 by Adam Smith in The Wealth of Nations: [77] George believes that the general argument of free trade is insufficient.