As globalization continues to drive growth and development in the world economy, free trade agreements have become increasingly important. These agreements promote trade in goods and services without the hindrance of trade barriers, such as tariffs and quotas. Free trade agreements can be bilateral or multilateral, and can offer significant benefits to participating countries. In this article, we’ll take a closer look at some of the available free trade agreements.
North American Free Trade Agreement (NAFTA)
The NAFTA agreement was signed in 1994 and was a trilateral agreement between the United States, Canada, and Mexico. This agreement aimed to create a free trade area between the three countries, and it eliminated tariffs on goods traded between the three countries. NAFTA was replaced by the USMCA, which came into effect in July 2020. The USMCA retains the principles of NAFTA while modernizing the agreement.
European Free Trade Association (EFTA)
The EFTA agreement was established in 1960 and is made up of four European countries: Iceland, Liechtenstein, Norway, and Switzerland. This agreement promotes free trade in goods and services between the four countries, and it eliminates most tariffs on trade between them.
Trans-Pacific Partnership (TPP)
TPP is a multilateral trade agreement that was proposed in 2005 by a group of Pacific Rim countries. This agreement was signed in February 2016, but the United States withdrew from the agreement in 2017. The remaining 11 countries signed a revised agreement called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018. This agreement aims to create a free trade area between the 11 countries and eliminate most tariffs on trade.
ASEAN Free Trade Area (AFTA)
The AFTA agreement was signed in 1992 and is made up of ten Southeast Asian countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. This agreement aims to promote free trade in goods between the member countries, and it eliminates most tariffs on trade between the countries.
Free trade agreements are an important tool for promoting global economic growth and development. By eliminating trade barriers, these agreements make it easier for businesses to trade goods and services across borders. The agreements listed above are just a few examples of the many free trade agreements that are available. As businesses seek to expand globally, a thorough understanding of these agreements and their benefits can be extremely valuable.