Types of International Free Trade Agreements

A free trade agreement (FTA) is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Types of FTAs

• Free Trade Area (FTA): This is the most basic form of free trade agreement. In an FTA, countries agree to eliminate or significantly reduce tariffs and trade barriers on a wide range of goods traded between them. However, each country retains its own trade policies ....