Final answer:
Free trade agreements are designed to promote trade by reducing barriers, including quotas, but they may still allow quotas in certain circumstances to protect industries or manage trade imbalances.
Step-by-step explanation:
The question of whether free trade agreements allow the use of quotas is a significant one in understanding international economic policy. Free trade agreements are generally designed to reduce barriers to trade between countries, which includes reducing the use of tariffs and quotas. However, while the intent of these agreements is to encourage open trade, they do sometimes permit the use of quotas in specific circumstances to protect certain industries or to address trade imbalances.
For example, historical instances like the imposition of a quota on Japanese automobiles by the Reagan Administration during the 1980s and the international Multifiber Agreement that ran from 1974 to 2004, illustrate that quotas can be utilized even with free trade agreements in place. Nevertheless, the aim is to have minimal restriction on the expansion of international companies to reap the benefits of free trade.