Free Trade Area
Candlefocus EditorBy eliminating or reducing tariffs and other trade barriers, Free Trade Areas promote and facilitate the international division of labour. The ease of trading encourages countries to specialize in their core production or service capabilities, thereby increasing efficiency and driving down the cost of goods and services for the countries involved. This, in turn, provides cheaper goods and services for consumers and businesses, greater competition and increased choice, increased diversification of investments, employment, inward investment and an improved capacity for innovation.
While Free Trade Areas have proven to be a positive force in promoting international trade and economic growth, there are opponents to the concept of reducing or eliminating trade barriers. In particular, some argue that certain sectors, such as agriculture and textiles, may suffer due to the elimination or reduction of tariffs. Moreover, some believe that free trade is a way for multinational corporations to exploit labour and environmental laws, with the lower taxes and reduced regulation inviting such exploitation.
In spite of these criticisms, the benefits of Free Trade Areas are undeniable. By eliminating or reducing trade barriers, these economic blocs facilitate the free flow of goods and services, promote specialization in production and services, reduce prices and stimulate technological advancements. Consequently, Free Trade Areas remain a cornerstone of international economic integration.