ECONOMIC INTEGRATION: FREE TRADE AREA
At the lowest level there is the preferential trade area, this means that the members charge each other lower tariffs than those applicable to non-members, however there is no free movement of goods within the area.
A free trade area means that the barriers and quotas to mutual trade are removed.
For instance, the members of the North American Free Trade Area (NAFTA), Canada, Mexico and the United States, pledge to do away with the barriers to mutual trade. Unlike a customs union, each member continues to determine its own commercial relations with non-members.
Other examples of free trade area are the ones between Mexico and the EU; between Canada and Chile; between the US and Jordan; ...
Different Forms of Economic Integration:
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