Goods and services have been traded internationally for centuries. Historically, this trade has been controlled by governments, either through force or through import and export taxes (tariffs), subsidies and other regulations. But, whatever the method of intervention, the aim has always been to maintain favourable terms of trade for the country exercising these measures. .
The support by government of national interests, through tariff and non-tariff measures, is known as "protectionism". The removal of such trade barriers, combined with improvements in international communication, technology and transportation, has led to increasingly interdependent economies in global basis. .
And in the embryonic years of a new, and so crucial for the mankind, millennium, never before have so many countries at such different levels of development been involved towards a common socio-economic goal, such as the progressive removal of obstacles to international trade and investment, something most commonly known as "trade liberalisation". Nevertheless, somewhat paradoxically, at no time during the post-war period has the prospect of further liberalisation generated so much global public resistance and anxiety. .
The purpose of this paper is to contribute to the arguments of the long-debated "protectionism or trade liberalisation?" issue, by addressing what trade liberalisation is exactly, identify its prime causes and acknowledge, value and present its consequences to the world. So, the starting point of this effort is to define "trade liberalisation".
What is trade liberalisation?.
In theory, trade liberalisation is the reduction of the official barriers to trade, which affect the relative prices of goods and services. In practice however, it is difficult to measure the overall degree of liberalisation because one does not know how effectively the corresponding policy changes have been implemented. The way round this problem is to define liberalisation as a practical outcome rather than a set of regulation inputs.
