Definition
Trade liberalisation is the reduction or elimination of policy barriers to international trade — tariffs, quotas, import licences, content requirements, anti-dumping measures, and a long list of "non-tariff barriers." It proceeds unilaterally (countries lowering their own tariffs), bilaterally (free-trade agreements between two countries), regionally (NAFTA/USMCA, the EU single market, ASEAN), and multilaterally (the GATT 1948-1994 and the WTO since 1995).
Post-war trade liberalisation reduced average tariffs in advanced economies from above 30% in 1947 to around 3-5% by 2000 — a dramatic structural change in the world economy. It is one of the policy underpinnings of the contemporary wave of globalisation, alongside capital-account liberalisation and deregulation.
Why it matters
How it works
Reciprocal tariff cuts in successive GATT/WTO rounds were the workhorse mechanism. Each "round" of negotiations — Geneva 1947, Kennedy 1964-67, Tokyo 1973-79, Uruguay 1986-94 — brought multilateral commitments to reduce tariffs on a defined set of goods. The Uruguay Round was the most ambitious, extending the system to services (GATS), intellectual property (TRIPS), and agriculture, and creating the WTO with a binding dispute-settlement mechanism.
Outside the multilateral track, regional and bilateral agreements proliferated, especially after the WTO's Doha Round stalled in the 2000s. These typically go beyond multilateral commitments — covering investment, services, and regulatory harmonisation — but apply only between their signatories.