Investments glossary

Free Trade Area

A free trade area is a region in which a group of countries has signed a free trade agreement and maintain little or no barriers to trade in the form of tariffs or quotas between each other. Free trade areas facilitate international trade and the associated gains from trade along with the international division of labor and specialization. However, free trade areas have been criticized both for costs that are associated with increasing economic integration and for artificially restraining free trade.

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