Trade liberalisation
Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
Trade liberalisation means cutting or removing tariffs, quotas and other barriers to trade between countries. It opens the home market to foreign goods and pushes domestic firms to become more efficient. It can also hurt producers who compete with imports.
Example
India's 1991 reforms cut tariffs sharply, from peak rates above 300% in 1990–91. They also abolished import licensing except for hazardous and environmentally sensitive industries, and removed export duties. Quantitative restrictions on imports of manufactured consumer goods and farm products were fully removed from April 2001.
Don't confuse with
- Free trade: this is the end point, with no trade barriers at all. Trade liberalisation is the process of moving towards it, and some barriers can still remain.
Related concepts
- Free trade
- Protectionism
- Trade barrier
- Infant industry argument
- Strategic trade policy
- Beggar-thy-neighbour policy
- Export promotion
- Trade openness
- Countertrade