What are Free Trade Agreements?

Free Trade Agreement. It is a legally binding contract between two or more countries. The purpose is to promote economic integration. One of its goals is to eliminate trade barriers and allow products and services to flow freely between countries. The trade barriers referred to here may be tariffs, complicated rules and so on.

Free trade agreement

First, free trade agreements have promoted the development of international trade by reducing transaction costs and circulation costs, through trade liberalization and facilitation, and by promoting the creation of new FTAs.

Secondly, the free trade agreement promotes international investment and has the effect of optimizing the world's industrial structure and resource allocation.

Thirdly, the free trade agreement can promote the deepening of economic cooperation between members based on trade liberalization, which may result in the creation of regional common currencies, the world common currency, the strengthening of the common interests of the economic interests of countries around the world, and even The process of peaceful integration in world politics has had a positive impact. ^[15]