Free Trade And Trade Agreements

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Free Trade

Free trade is a policy in which the government does not interfere against imports or impedes with exports by applying tariffs (Encyclopedia, 2015). Free trade is about removing barriers like tariffs, quotas, and other restrictions. Tariffs are taxes that the countries enforce on imported goods and services, they are set in place to make trade harder. This ultimately causes the price of goods and services for consumers to be more expensive. Quotas are a limited quantity countries put on imports and exports. Barriers to trade is a government limitation on the amount of international goods and services. Countries decide to put up barriers on trade for the sole purpose of protecting their own economy and interests. The United States has free trade agreements with 20 countries, including the North American Free Trade Agreement (NAFTA), the Tran-Pacific Partnership Agreement (TPP), and the Transatlantic Trade and Investment Partnership (T-TIP). There are many advantages and disadvantages with free trade agreements. The North American Free Trade Agreement was implemented in 1994, it consists of three countries; Canada, Mexico, and the United States. NAFTA is the largest free zone which sets the groundwork for a stronger economic development as well as the raise in prosperity between this countries (NAFTA, 2013). For the three countries in the agreement, NAFTA has removed tariffs and non- tariff barriers such as quotas, licensing and other limitations. Before it was
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