Syllabus T. Y. B. A. Paper : IV advanced economic theory with effect from academic year 2010-11 in idol

13.3.1 Free Trade Arguments: 
The dictionary definition of free trade states it as a policy of 
allowing people of one country to buy and sell from other countries 
without restrictions. This idea originated with the influential British 
economist, philosopher, and author of The Wealth of Nations, 
Adam Smith. He inspired the writings of great economists such as 
David Ricardo, Karl Marx, Thomas Malthus, and others. According 
to Smith, specialization and trade is the best solution to create a 
flourishing American economy. William H. Peterson, holder of the 
Lundy Chair of Business Philosophy at Campbell University, agrees 
with Smith's philosophy.
Free Trade refers to the Trade between countries without 
any restriction or discrimination. In other words when the citizen of 
one country are free, either to import or export or to do both, with 
the citizens of the country, then the trade is termed as free. In more 
precise words, Free Trade is the restrictionless trade among the 
nations. Thus in a free trade no differentiation is made between the 
national or foreign industries. No policy exists to favour the national 
industries and shock the foreign industries. 
Adam Smith defined Free Trade as the, "of commercial 
policy which drawn no distinction between domestic and foreign 
commodities and therefore neither imposes additions burden on the 
latter, for grants any special favours to the farmers."The definition 
does not however mean that under the 'Free Trade banner' various 
duties and levies will disappear. But it means that the duty is to be 
levied only to raise the revenue and not with any other purpose like 
the protection of the interests of the domestic enterprises. 
In the free trade the countries take part because they get the 
comparative advantage by doing so. If the countries are not 
disturbed in this context them the trade may become of durable in 
character. To quote Cairns, "If nations only engage in trade when 
advantage arises from doing so any interference in their free action 
in trading can only have the effect of debarring them from an 
advantage.