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free trade (F1)<br />International trade, unhindered by TARIFFs, other restrictions on imports and export subsidies. This freedom was strongly recommended by the CLASSICAL ECONOMISTS on the basis of ABSOLUTE ADVANTAGE, in the case of SMITH, or COMPARATIVE ADVANTAGE in the cases of RICARDO and TORRENS. Today, it is recommended as a means of achieving international specialization of production and maximization of world economic welfare. In practice, completely free trade is rare. There are always particular interest groups and industries within a country demanding PROTECTION, with varying degrees of success. Even within a cusToMs UNION there can be disguised protection, e.g. within the EUROPEAN COMMUNITY through the imposition of quality and other controls. In the post-1945 period, the GENERAL AGREEMENT ON TARIFFS AND TRADE has attempted to prevent a return to the extensive protectionism characteristic of the 1930s. In the 1980s there was some support for protectionism, especially in the USA and in NEWLY INDUSTRIALIZED couNTRIES. Free trade has always been most strenuously advocated by major countries with trade surpluses, e.g. the UK in the nineteenth century and the USA in the 1950s and 1960s.<br /><em>See also:</em> Corn laws; protection; SmootHawley Tariff Act 1930 <br /><em>Reference</em><br />Bhagwati, J. (1988) Protectionism, Cambridge, MA: MIT Press.<br /> Carden, WM. ( 1974) Trade Policy and Economic Welfare, Oxford: Clarendon Press.
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European option (G1)<br />An OPTION that can only be exercised on its expiry date.
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conditionality (F3)<br />Lending to a debtor on condition that the loan is used for a specific purpose so that there is less risk of default in servicing the loan. It is argued that the INTERNATIONAL MONETARY FUND and WORLD BANK in making this stipulation make 'conditionality' a PUBLIC GOOD.
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International Air Travel Association (L9)<br />Founded in 1945 in Havana, covering most scheduled airlines, whose aims include promoting safe, regular and economical air transport. In practice, it has been a major example of an international cartel that has kept fares high on many international routes by licensing few operators. Licences were awarded for operating lucrative routes, especially across the Atlantic, if the same airline undertook to fly on lossmaking routes. State-owned airlines have been avid to maintain such protection. However, such a restriction on competition
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