Open trade refers to the economic policy of promoting free trade and reducing barriers to international commerce, such as tariffs, quotas, and regulations. This approach encourages businesses to compete in a global market by allowing them to freely import and export goods and services across borders.

In contrast, closed trade policies limit imports and exports by imposing trade barriers, tariffs, and other restrictions on foreign goods and services. Closed trade policies are often implemented to protect domestic industries from foreign competition, but they can also limit the benefits of international trade.

Open trade policies promote greater economic efficiency, specialization, and innovation. They also help to create new markets, generate employment opportunities, and reduce prices for consumers. However, open trade policies may also lead to increased competition, which can negatively impact some domestic industries. Ultimately, the effectiveness of open trade policies depends on a variety of factors, including a country's economic and political environment, as well as its ability to effectively manage the risks and challenges associated with international trade.