A Free Trade Agreement (FTA) is a pact between two or more countries that aims to reduce or eliminate barriers to trade, such as tariffs, import quotas, and regulations. The primary goal of an FTA is to foster economic cooperation and boost trade by making it easier and more cost-effective for countries to exchange goods and services. FTAs can cover various areas, including goods, services, intellectual property, and investment, providing a framework for enhanced economic integration.
FTAs vary in scope and depth, with some focusing on specific sectors while others cover a broad range of trade issues. Notable examples include the North American Free Trade Agreement (NAFTA), now updated as the United States-Mexico-Canada Agreement (USMCA), and the European Free Trade Association (EFTA) agreements. By removing or reducing trade barriers, FTAs encourage businesses to expand their markets and enhance their competitive advantage on a global scale.
