Question: Free trade has generally been seen as a positive for firms, consumers etc. Over the past several decades, efforts for the most part have been taken around the globe to remove trade barriers to achieve "free trade". Some high level executives have made statements implying free trade is not conceivable due to exchange rates. It is often claimed that despite treaties removing trade barriers any country can use the exchange rate mechanism to impose trade barriers. Briefly explain what is meant by that statement and provide a two country fictional example of how this would work.