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FTA (Free Trade Agreement)


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The Basics of Free Trade Agreements

What is a Free Trade Agreement (FTA)?

A Free Trade Agreement (FTA) is a formal accord negotiated between two or more nations with the aim of reducing trade barriers and fostering increased commerce between the involved parties.

How do FTAs Facilitate International Trade?

**FTAs** serve to enable businesses to engage in cross-border trade with minimal interference from governments. This involves the reduction or elimination of various trade restrictions, including tariffs, quotas, subsidies, and other regulatory impediments.

Key Features of FTAs

  • **Reduced Trade Barriers:** FTAs aim to decrease obstacles to international trade.
  • **Government Interference:** Businesses operating under FTAs experience limited government intervention, fostering smoother cross-border transactions.
  • **Tariffs and Quotas:** FTAs commonly address and reduce tariffs, quotas, and other monetary barriers that hinder trade.

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