Describe the main alternatives to a Free Trade policySolutio

Describe the main alternatives to a Free Trade policy.

Solution

By adopting a Free Trade policy a government would refrain from interfering in the operation of supply and demand in the trade of goods and services. The underlying thinking of this policy is that it permits trading partners to gain mutually through the natural operation of the market.
There are two main alternatives to this approach:
Protectionism is an economic model that represents the exact opposite of Free Trade. The policy is defensive by nature and involves restricting international trade in order to protect local businesses and jobs from foreign competition. Typical methods include import tariffs, quotas or paying subsidies to local businesses. The justification for the policy may be that a government may believe that its industries may be damaged by (possibly unfair) foreign competition. Protectionism can have short term benefits but in the longer term can be unhealthy by allowing a country