Trade liberalization refers to the removal or reduction of restrictions or barriers on the free exchange of goods between nations. These barriers include tariffs, duties, surcharges, licensing rules, and quotas. The goal of trade liberalization is to promote free trade and increase economic welfare by allowing countries to specialize in producing the goods and services where they have a comparative advantage.

Trade liberalization can benefit stronger economies but put weaker ones at a greater disadvantage. Proponents of trade liberalization claim that it ultimately lowers consumer costs, increases efficiency, and fosters economic growth. However, trade liberalization can also pose challenges, such as increased competition, which can spur firms to increase efficiency and cut costs, or it may act as an incentive for an economy to shift resources into new industries where they can maintain a competitive advantage.

Trade liberalization can also benefit developing countries by promoting economic growth, development, and poverty reduction. However, remaining trade barriers in industrial countries are concentrated in the agricultural products and labor-intensive manufactures in which developing countries have a comparative advantage. Further trade liberalization in these areas, particularly by both industrial and developing countries, would help the poorest escape from extreme poverty while also benefiting the industrial countries themselves.

In summary, trade liberalization involves removing barriers to trade between different countries and encouraging free trade. It can promote economic growth, development, and poverty reduction, but it can also pose challenges such as increased competition.