Question

Compare and contrast a free trade area and a common market. Provide examples. Be specific with your examples. Also describe the necessary terms.

Answer 1

Common market:

An agreement that eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.

Free trade Area (FTA):

The FTA is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff scheules for external countries.

Compare and contrast a free trade area and a common market

A free trade area and a common market have the same goal:

•To eliminate tarifs within their respective boundaries. However, a free trade area provides its members with a mass market without barriers to impete the flow of goods and services.

•A common market also adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor.

•. It is a joint marketplace for goods, services, and capital.

An example of free trade area is NAFTA MEANS ( north American free trade Agreement).

And example of common market is EUROPEAN economic community , EEC.

Free trade agreement and terms is international agreements to remove or reduce trade and investment barriers between countries.