FREE TRADE, the term applied to national commerce when relieved from such interference as is intended to im prove or otherwise influence it; that is, unrestricted by laws or tariffs, and not unduly stimulated by bounties. In all countries it was long held to be of im portance to encourage native production and manufactures by excluding from their own markets, and from the colonial markets over which they had control, the competing produce and manufactures of other countries. On this theory the great body of British com mercial legislation was founded till 1846, when the policy of free trade was intro duced in grain, and afterward gradually extended by the repeal of the navigation laws in 1849 and other great measures, till nearly all British commercial legis lation had been brought into conforming with it. Free trade can hardly yet be said to have been adopted as a principle of commercial policy by any nation ex cept Great Britain. As an economic
principle, free trade is the direct opposite to the principle or system of protection, which maintains that a State can reach a high degree of material prosperity only by protecting its domestic industries from the competition of all similar foreign industries. To effect this, coun tries either prohibit the importation of foreign goods by direct legislation, or im pose such duties as shall, by enhancing the price, check the introduction of foreign goods. The advocates of what is called fair trade in Great Britain profess a preference for universal or even com mon free trade, but seeing that Great Britain is almost the sole free trade country in the world, they declare that a policy of reciprocity is required for the protection of British traders and manu facturers. See PROTECTION.