What Do We Mean By Free Trade Agreement

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In principle, free trade at the international level is no different from trade between neighbours, cities or states. However, it allows companies in each country to focus on the production and sale of goods that make the best use of their resources, while others import goods that are scarce or unavailable domesticly. This mix of local production and foreign trade allows economies to grow faster and, at the same time, better meet the needs of their consumers. Trade liberalization negotiations are expected to overcome deep resistance to free trade by creating a coalition of interests between domestic producers seeking access to markets abroad and consumers and import users benefiting from increased competition in the domestic market. Between 1948 and 1994, GATT conducted a series of “cycles” that successfully reduced the frequency of tariffs and other trade restrictions, as well as developed agreed disciplines on the various forms of intervention of national governments in trade (read more about trade evidence). At the same time, countries have also conducted preferential trade negotiations to move faster and further than is possible on a multilateral basis. This movement was reinforced by the failure of the WTO`s Doha Development Agenda, launched in 2001, to provide a comprehensive set of agreements. The United States has another multilateral regional trade agreement: the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). This agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua eliminated tariffs on more than 80% of U.S. exports from the non-textile industry. On the other hand, some local industries benefit. They are finding new markets for their duty-free products.

These industries are growing and employing more labour. These compromises are the subject of endless debate among economists. New Zealand`s overall objective in any free trade negotiations is to create a modern, quality, comprehensive, forward-looking, trade-oriented agreement that will facilitate the growth and development of our trade and investment relations with our trading partners. We therefore generally address a number of trade-related issues in the negotiations, including those listed below. There are currently a number of free trade agreements in the United States. These include multi-nation agreements such as the North American Free Trade Agreement (NAFTA), which includes the United States, Canada and Mexico, and the Central American Free Trade Agreement (CAFTA), which includes most Central American nations.

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