A trade policy of placing no restriction on the movement of goods between
countries is known as free trade. Such a policy permits the flow of
international commerce in its natural environment, free of artificial
impediments.
It
denotes that system of commercial policy which draws no distinction between
domestic and foreign commodities, and therefore neither imposes additional
burdens on the later not grants any special favors to the former and thus
freedom of international exchange.
A policy of free trade however does not require the removal of all sorts of duties on the commodities in international exchange. It insists that duties maybe imposed exclusively for revenue and not at all for protection
Free trade is economically comparative because it permits allocation of resources, and manpower in accordance to the principle of comparative advantage, which is just an extension of the principle of division of labor. Because of natural and other facilities, each country is suited for the production of some particular commodities.
When countries are freely engaged in trade, the price mechanism under competition automatically ensures that each country specializes in producing those commodities which it can obtain more cheaply than by producing them itself. Further when there is specialization, the labor and capital of a country tend to move in to those channels of industry where they have optimum use, and can produce maximum.
In Uganda, as according to the national cooperative policy published by the ministry of trade, industry and cooperatives, farmers are engaged in small scale production but however lack organization at the farm, and marketing levels to effectively exploit their land and labor resources, and enhance their bargaining power.
The countries internal market has increased due to sustained population growth, increased school enrolment, urbanization, industrialization and improvement in the per capital income. Its strategic location in the great lakes region represents a huge export market potential for cooperative products to neighboring countries.
The
USA on the other hands awards its companies that contribute to its growth by
expanding its export activities in Agriculture, Automotive/Aviation and Marine,
Building, Construction and Hardware, Food/Food Processing, Sports and
Recreation, Information Technology and Telecommunications, Beauty and Fashion,
Safety and Security.
Each
year these companies receive export of the year award from Think Global Inc,
publisher of the commercial news of the US, the official export promotion
magazine of the US, department of commerce.