Question

Discuss why Free Trade Agreements (FTA) is growing rapidly in these days and why it becomes more acceptable around the world.

Answer 1

Free Trade Agreements refers to  bilateral or multilateral written agreement between countries with a set of regulations. FTAs are designed to reduce the barriers such as tariffs and trade quotas to increased economic integration between participating countries.

Importance of Free Trade Agreements is going these days because of following benefits :

• The governments support business expansion overseas as it increases the counties GDP. Jobs are created and the government it able to collect more taxes making the country's wealth increase, which will result in higher standard of living.
• FTAs are designed to reduce the barriers to trade between two or more countries, which are in place to help protect local markets and industries.
• It allows the signing members to trade freely with each other.
• It results in freer international trade by removing trade barriers/restrictions to the flow of goods and services between trading nations.
• It protects and/or limit supply of foreign goods and services. The flow on effect of this is usually price changes due to limited or abundance of supply.
• It results in increased production, improved efficiencies in production and consumer benefits in the domestic economy.
• It generates business growth and hence expansion, thus increasing GDP; employment creation and increased taxes, fees and duties.