Question

Write short notes on Free Trade areas.

Answer 1

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Free Trade area

A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers – import quotas and tariffs – and to increase trade of goods and services with each other.

If people are also free to move between the countries, in addition to a free-trade agreement, it would also be considered an open border. It can be considered the second stage of economic integration.

Every trade common market, customs union, economic union, customs and monetary union and economic and monetary union also has a free-trade area, but these are each listed in their own articles only.