There are two "that" in your sentence. Which one are you referring to? understand why many economists believe THAT unrestricted free trade between nations will raise the economic welfare of countries THAT participate in a free trade system. The first one refers to whole subordinate clause that follows: Economists believe: Unrestricted free trade between nations will raise the economic welfare of countries... The second one could be replaced by "which": The economic welfare of countries WHICH participate in a free trade system

The first 'that' refers to the strong belief of the economists and the second 'that' refers to the countries which are a part of a free trade system.Hope it helps!!!!

I think the first ( that ) refers to what do many economist believe, & the second ( that) refers to the countries where the economic welfare will raise. sorry if there is anything wrong :(