– Free trade is the simpler of the two theories: a laissez-faire approach, with no restrictions on trade.

– The main idea is that supply and demand factors, operating on a global scale, will ensure efficient production.

– Therefore, nothing needs to be done to protect or promote trade and growth because market forces will do so automatically.

– In contrast, protectionism holds that regulation of international trade is important to ensure that markets function properly.

– Protectionism exists in many different forms, but the most common are tariffs, subsidies and quotas.