Taking advantage of free trade between countries has the potential to help your organization enter and compete more easily and favorably in the global marketplace through reduced trade barriers. No wonder a growing number of countries worldwide are now long forward to signing free-trade agreements among themselves.
But what really comprises a free trade agreement and how does it work in the first place? Well, a Free Trade Agreement (FTA) is basically an agreement between two or more countries where the nations agree on specific obligations affecting trade in goods and services.
These agreements between countries also allows for the maximum protection of investors and intellectual property rights, among other topics. The essence of advocating for free trade between countries is to reduce barriers, protect interests competing abroad, and enhancing the rule of law in the FTA partner country or countries.
An important point worth remembering is that parties taking part in a free-trade area agreement are not required to establish and maintain matching external tariffs regarding trade with non-participating countries, as is the case with a customs union. What this simply means is that involved countries are free to come up with whatever tariff regime applying to import from non -participants as they so deem viable.
In most cases, free trade between countries helps create a fairer trading relationship between participants. This action goes a long way in allowing for equality through the establishment of a fair set of rules. That’s really vital and especially at a time the world has become much more competitive in last couple of years.
The good thing about free trade between countries is that they enhance freedom. And this is easy to see since most of these agreements include clauses that help nations avoid the worst possible damage that isolationism could do to their own people.
Moreover, it allows for more resources to be accessible in order to make jobs in innovative industries. That’s precisely what is needed to help countries in a free trade agreement develop and boost their manufacturing and other important sectors.
