Unsurprisingly, financial markets see the other side of the coin. Free trade is an opportunity to open up another part of the world to local producers. If there is free trade and tariffs and quotas are abolished, monopolies will also be abolished because more players will be able to enter the market and join the market. Once negotiated, multilateral agreements are very powerful. They cover a wider geographic area, giving signatories a greater competitive advantage. All countries also give themselves the status of the most favoured nation – and grant the best conditions of mutual trade and the lowest tariffs. Few issues divide economists and the extent of public opinion, as does free trade. Studies show that economists at U.S. university faculties are seven times more likely to support a free trade policy than the general public. In fact, the American economist Milton Friedman said: “The economic profession was almost unanimous on the question of the desire for free trade.” A free trade area will be established between two or more states. Import tariffs and non-tariff barriers between them are removed.
Rules on reciprocal trade, services and intellectual property protection are also established. Goods and services can be exchanged between Member States without tariffs or taxes and investments can be negotiated without barriers (see Malcher 2005: 86). In Latin America, the first free trade agreement with the Association Latinoamericana de Libre Comercio (ALALC) was established in 1960, Pacto Andino followed in 1969 and in 1980, ALALC was replaced by the Associationcin Latinoamericana de Integracin (ALADI). These should promote regional cooperation as part of the Cepalismo strategy. The European Union is now a remarkable example of free trade. Member States form an essentially borderless unit for trade purposes, and the introduction of the euro by most of these countries paves the way. It should be noted that this system is governed by a Brussels-based bureaucracy, which has to deal with the many trade-related issues that arise between the representatives of the Member States. However, this distinction between the free trade area, the customs union, the common market, economic and monetary union and political union does not reveal much about the character of an individual regionalisation project.