Free trade is one in which

Analyze the question: The question asks what defines a free trade arrangement (a free trade area). This is a common WASSCE topic under economic integration.

Explain the concept: Economic integration has stages, from loosest to tightest:

1. Free trade area: Members remove tariffs and trade barriers among themselves, but each member keeps its own trade barriers (tariffs) against non-members. Example: ECOWAS trade liberalisation scheme, NAFTA/AfCFTA.
2. Customs union: A free trade area plus a common external tariff against non-members.
3. Common market: A customs union plus free movement of factors of production (labour and capital).
4. Economic union: A common market plus common fiscal and economic policies.
5. Complete/monetary union: A single currency and a single central bank.

Solution (checking each option):

• A. Each member operates its own barriers against non-members. This matches a free trade area, where each country keeps independent trade policies toward outsiders. ✔
• B. Factors of production are mobile. This describes a common market. ✘
• C. Members adopt a common external tariff against non-members. This describes a customs union. ✘
• D. Members adopt common fiscal and economic policies. This describes an economic union. ✘

Correct answer: A

Exam tip: Remember the ladder F-C-C-E-M: Free trade area → Customs union → Common market → Economic union → Monetary union. The key phrase for each stage:

• Free trade: own barriers against outsiders
• Customs union: common external tariff
• Common market: mobile factors
• Economic union: common policies