Free Trade Agreement (FTA)

A free trade agreement (FTA) is an agreement between two or more countries that eliminates or reduces tariffs and other trade barriers on goods and services traded between them. FTAs can also include provisions on investment, intellectual property, and dispute settlement.

FTAs are designed to promote trade between countries by making it easier and cheaper for businesses to trade with each other. They can also help to boost economic growth and create jobs.

There are many types of FTAs, but they typically include the following provisions:

• Tariff reduction or elimination,
• Provisions to protect your business investments and intellectual property,
• Dispute settlements to ensure that the agreement is implemented fairly,
• Other trade barriers to reduce trade costs and make it easier for businesses.

Tariff reduction, or being able to take advantage of the ‘free’ aspect of an FTA is often a post-trade effect. A standard duty may need to be paid up front, but through a customs duty drawback, you can receive a full refund.

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U.S. Free Trade Agreements: Find Savings Close to Home  

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