Free Trade Agreement (FTA) – UPSC Prelims

Free Trade Agreement (FTA)
  • FTA is an arrangement between two or more countries to reduce trade barriers in imports and exports among them.
  • With  FTA, goods and services can be exchanged across international borders with limited or no government tariffs, quotas, or subsidies.
  • In the current world, free trade policy is often implemented by means of a formal and mutual agreement of the nations involved. However, a free-trade policy may simply be the absence of any trade restrictions.
  • Based on the level of openness in the trade between the countries free trade policies can be categorized as,
    • Preferential trade agreement
    • Free trade agreement
    • Comprehensive Economic Partnership Agreement
    • Comprehensive Economic Cooperation Agreement
    • Customs Union
    • Common Market
    • Economic Union

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