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International operations and international investment appraisal

1.2 Free trade and trade barriers

National governments sometimes implement ‘protectionist’ policies,
such as tariffs, quotas and embargos, in an attempt to benefit local
companies at the expense of international companies.

The World Trade Organisation (WTO) aims to reduce these barriers to
international trade.

In many parts of the world, national governments have created trade
agreements and common markets to encourage free trade (e.g. the
European Union).

However, the WTO is opposed to these arrangements because they
encourage trade between members but often have high trade barriers
for non-members.

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