FTAs: Positives and Challenges

Significance

  • Market Access: Free Trade Agreement (FTA) partners get easier market access into one another's nations by eliminating tariffs and some non-tariff obstacles.
  • Preferential Treatment for Exports: Exporters prefer FTAs because they receive preferential treatment over competitors from non-FTA member countries.
  • Increased Investment: Potential for greater foreign investment from sources outside the FTA. Consider two countries A and B having an FTA. Country A has high tariff and large domestic market. The firms based in country C may decide to invest in country A to cater to A’s domestic market. However, once A and B sign an FTA and B offers ....
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International Relations