Passage Summary: The author argues that NAFTA isn't really 'free trade' because it prevents workers from moving freely between countries. Since the economist who defined free trade said any such restriction ruins the concept, the author claims the agreement is harmful and mislabeled.

Conclusion: The North American Free Trade Agreement is inaccurately named because it fails to meet the actual criteria for free trade.

Reasoning: According to the foundational principles of Adam Smith, free trade requires the absence of obstacles to the movement of goods, investment, and labor; however, NAFTA restricts the movement of workers across borders.

Analysis: This 'Method of Reasoning' question asks us to describe the logical moves the author makes. The argument functions by introducing a specific definition of a term from an authoritative source and then demonstrating that a particular case fails to satisfy all the conditions of that definition. By showing that NAFTA violates the 'labor' requirement of Smith’s three-part criteria, the author justifies the claim that the name of the agreement is a misnomer. It is a classic application of a general principle to a specific instance to reach a negative evaluation.