Free trade is international trade without restraints imposed by governments. For a variety of reasons, governments often impose limitations on trade, and thus totally free trade does not exist in the world. Limitations on trade include TARIFFs, quotas, and other NONTARIFF BARRIERS. Tariffs can be used to generate revenue or increase the price of imported PRODUCTs, making domestically produced products cheaper and more competitive in the marketplace. Quotas are quantitative limits on the amount of a specific import that can be brought into a country during a period of time. To protect domestic textile jobs for decades the United States imposed quotas on textiles coming into the country. Today nontariff barriers are often the biggest restraint on free trade. Nontariff barriers include labeling requirements, “voluntary export quotas,” technical standards, and health and safety constraints. For example, the United States, ignoring rulings by the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) and the WORLD TRADE ORGANIZATION (WTO), used safety concerns to prohibit Mexican trucks from having full access to U.S. highways. In the 1980s Japan, fearing the imposition of quotas, voluntarily restricted automobile shipments to the United States for several years. The argument for free trade is based on the ideas of Adam Smith, author of the An Inquiry into the Nature and Cause of the Wealth of Nations (1776), and 19th-century economist David Ricardo. Smith argued against MERCANTILISM, the idea that a country’s WEALTH and power could be increased through the accumulation of precious metals and by maintaining a favorable balance of trade. Mercantilism was the dominant economic doctrine of his time, but Smith proposed free trade, or unrestricted access to markets, instead. (Ironically, he ended his career as port tax collector in his native Scotland.) David Ricardo, building on Smith’s ideas, was the originator of the concept of COMPARATIVE ADVANTAGE. The law of comparative advantage is the principle that firms, people, or countries should engage in those activities for which their advantage over others is the largest or their disadvantage is the smallest. Trade is then based on doing those things that can be done relatively more efficiently than others can do. Logically, free trade encourages individuals, firms, and countries to specialize in doing those things they can do well and trading for those that they cannot do as efficiently. Also, logically, comparative advantage depends on access to markets to make exchanges—free trade. The other arguments for free trade are that exports pay for IMPORTS and the cost of protection of domestic industries. Countries that attempt to limit imports usually find that their exports face similar restrictions, offsetting any economic gain from reducing imports. Restricting free trade also creates a strange dichotomy. Using the example of Japan’s voluntary export limits in the 1980s, economists found for each American automobile industry job retained because Japanese producers were limiting exports, American consumers paid approximately $250,000 more for cars. The benefits of trade restrictions usually are concentrated, in this case in the U.S. automobile industry, while the costs are dispersed among consumers in general. Because of this dichotomy, there is often a strong, vocal group of supporters for restricting free trade and no strong group opposing it on an economic basis. Trade among countries has existed for thousands of years, well before the ideas of Smith and Ricardo, but there are many economic and social-justice reasons countries and individuals do not always support free trade (as evidenced in the WTO meetings in Seattle in 1999). One argument against free trade is to prevent unfair foreign COMPETITION. Free trade and fair trade do not mean the same thing. Free trade, as stated earlier, is trade without restraints, whereas in fair trade everyone “plays by the same rules.” Sometimes referred to as a market with a “level playing field,” fair trade precludes DUMPING, export subsidies, and, more recently, abuse of workers and the environment. As the largest economy in the world, the U.S. market is important to any multinational firm. U.S. businesses often ask government to restrict access to the U.S. market, claiming unfair trade practices on the part of firms from other countries. Under section 301 of U.S. trade rules, the U.S. trade representative must investigate and report findings regarding claims of unfair trade practices. NAFTA, the NORTH AMERICAN FREE TRADE AGREEMENT, is often cited as an example of the benefits of free trade. Since 1995 NAFTA has significantly increased trade among the United States, Canada, and Mexico, but close inspection of the agreement (more than 1,100 pages long) shows a myriad of exceptions and limitations. Free trade would be trade without limitations; NAFTA significantly reduces the barriers to trade but does not eliminate restrictions. The World Trade Organization’s goal is to increase world free trade. More than 100 countries are members of the WTO, but free trade is still a vision for the future among those who support that vision.