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What is Free Trade Agreement (FTA) ?





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Free Trade Agreement

What is Free Trade Agreement?

Free Trade Agreements, or FTA, are conventions to reduce barriers in trade. FTA’s have proven to be one of the best ways to open up foreign markets to U.S. exporters. They don’t only reduce barriers to U.S. exports, but they also protect U.S. interests, enhancing the rule of law in the FTA partner country. 

The cutback in trade barriers results in the creation of a more stable and transparent trading and investment environment, making it easier and more affordable for U.S. companies to export their products and services to trading partner companies and markets.

What are some successful examples of FTA partnerships?

A good example of FTA partnerships involving the United States is the USMCA (United States-Mexico-Canada) Agreement, which was formerly known as NAFTA. This is a trilateral agreement between the U.S., Mexico, and Canada, which allows for duty-free import and export within the three parties. A significant portion of the ingredients or parts of the goods must be manufactured in one of the three countries, according to the agreement. The rules that determine if the product can be considered made in one of the member countries are known as the “Rules of Origin” and vary from agreement-to-agreement. 

Other important agreements to trade worldwide, are AUSTA— between the United States and Australia, Israel- United States FTA, EU-Vietnam FTA, and the Eurasian Economic Union with multiple CIS countries.




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