What is the meaning of free trade area?

A free trade area is a grouping of countries within which tariffs and non-tariff trade barriers between the members are generally abolished but with no common trade policy toward non-members. The North American Free Trade Area (NAFTA) and the European Free Trade Association (EFTA) are examples of free trade areas.

What Central American country has what is called a free trade zone?

The Central America Free Trade Agreement (CAFTA) is a NAFTA-style deal with five Central American nations (Guatemala, El Salvador, Honduras, Costa Rica and Nicaragua), and the Dominican Republic.

What is free trade in Latin America?

The Free Trade Area of the Americas (FTAA) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas, excluding Cuba. Negotiations to establish the FTAA ended in failure, however, with all parties unable to reach an agreement by the 2005 deadline they had set for themselves.

What is cafta and its purpose?

CAFTA’s purpose is to “eliminate tariffs and trade barriers and expand regional opportunities for the workers, manufacturers, consumers, farmers, ranchers and service providers of all the countries.” This article introduces the trade agreements leading to CAFTA and summarizes CAFTA’s provisions.

What are the example of free trade area?

A free trade area (FTA) is where there are no import tariffs or quotas on products from one country entering another. Examples of free trade areas include: EFTA: European Free Trade Association consists of Norway, Iceland, Switzerland and Liechtenstein. NAFTA: United States, Mexico and Canada (being renegotiated)

What are the features of free trade area?

A free trade area offers several advantages, including:

  • Increased efficiency. The good thing about a free trade area is that it encourages competition, which consequently increases a country’s efficiency, in order to be on par with its competitors.
  • Specialization of countries.
  • No monopoly.
  • Lowered prices.
  • Increased variety.

What is the Central American free trade agreement quizlet?

-The Dominican Republic Central America Free Trade Agreement (DR-CAFTA) is an agreement between the United States, Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. -It was first proposed in 2002 by the Administration of George W. Bush, with official negotiations beginning in 2003.

What Regions would be included in a free trade area of the Americas?

The Free Trade Area of the Americas is a proposed free trade agreement between the United States and 34 countries in North, Central, and South America, as well as the Caribbean. The exception is Cuba. Although the countries worked on it for a decade, it was never finalized.

What two major trade agreements affect trade in Central and South America the most?

Major trade arrangements include NAFTA, CAFTA-DR, the Southern Common Market (Mercosur) in South America , the Andean Community (CAN), the Caribbean Community and Common Market (CARICOM), the Central American Common Market (CACM), and the Latin American Integration Association (ALADI).

What are the benefits of CAFTA?

CAFTA-DR also improves customs administration and removes technical barriers to trade. It addresses government procurement, investment, telecommunications, electronic commerce, intellectual property rights, transparency, labor, and environmental protection.