Answer:
There
are two restrictions on foreign trade (i.e., trade of goods and services
between two sovereign nations) which are removed by liberalisation of foreign
trade.
(i) Entry Tax or Customs Duty This is
levied on goods being imported into a country to protect the local producer of
similar goods. This makes the foreign goods costlier, so that the local goods
can compete with it on price. Under liberalisation, ideally there will be no customs
duty on any imported product.
(ii) Quotas or Restrictions on the Quantity being Imported in a Specified
Period This will prevent cheap foreign goods being 'dumped' or 'flooding' the
market of another country. Under liberalisation, there will be no restrictions
on the quantity of goods being imported from any country.
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