Free Trade

George W is in Peru and the Asian Pacific Summit talking about the importance of free trade among nations to stimulate the world economy. I know that earlier this year the USA set up agreements with Peru, Panama and Colombia.

What I am not sure about is how exactly free trade works. Does this mean that no tariffs are involved? That the manufacturers can simply send their products to the participating countries with only the manufacturers making or losing a profit? Shouldn't the governments be making something out of the deal?

Not being a financial wizard, I would like any of you who have an idea of what free trade involves to write in and explain it to all of us. Please do it in simply language, I heard some of the finance boys on the talk shows going on and got completely confused.

Enjoy your weekend and stay warm.

Its Common Sense!