Free trade agreements (FTAs) are agreements between two or more countries to reduce barriers to trade, such as tariffs and quotas, in order to promote economic growth and increase the flow of goods and services between countries. There are many examples of FTAs around the world, but in this article, we will describe two examples of free trade agreements.
1. North American Free Trade Agreement (NAFTA)
NAFTA is an agreement signed between the United States, Mexico, and Canada in 1994. The agreement eliminates most tariffs on goods traded between the three countries, and also includes provisions for the protection of intellectual property rights, environmental regulations, and labor standards. Since its implementation, NAFTA has facilitated a significant increase in trade between the three countries, with total trade among them increasing from $290 billion in 1993 to $1.1 trillion in 2016. However, the agreement has also been subject to criticism from some groups who claim that it has led to job losses and lower wages in the United States.
2. European Union–Japan Free Trade Agreement (EU-Japan FTA)
The EU-Japan FTA is a free trade agreement signed between the European Union (EU) and Japan in 2018. The agreement aims to eliminate tariffs on 99% of goods traded between the two countries, and also includes provisions for the protection of intellectual property rights, environmental regulations, and labor standards. The agreement is expected to simplify trade between the EU and Japan, and to increase economic growth for both parties. The EU estimates that the agreement will increase the EU`s exports to Japan by 34%, while Japan estimates that it will add 290,000 jobs to its economy.
In conclusion, free trade agreements are important tools for promoting economic growth and improving trade relationships between countries. While there are many examples of FTAs around the world, the North American Free Trade Agreement and the European Union–Japan Free Trade Agreement are two important examples that illustrate the benefits and challenges of these agreements.