As countries reopen for international trade after the COVID-19 pandemic, the global economy is expected to get a boost from trade deals easing restrictions on the movement of goods and services. One such deal is the free trade agreement (FTA), which has been a popular choice for countries looking to increase their economic growth.
A free trade agreement is an agreement between two or more countries that eliminates tariffs, quotas, and other trade barriers, allowing for the free flow of goods and services between the participating countries. The FTA is a win-win situation for both countries, as it promotes export activities, attracts more foreign investments, and generates economic growth.
Currently, there are several free trade agreements in place, such as the North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP), and the European Union`s (EU) Free Trade Agreement. Each of these agreements has unique features, but the fundamental goal is the same – to enhance trade between nations.
Recently, there have been some updates on the free trade agreement front. In 2020, the United States-Mexico-Canada Agreement (USMCA) replaced NAFTA, a move that bolstered the market for agricultural products, increased the threshold for duty-free treatment for ecommerce transactions, and added new provisions related to intellectual property and labor rights.
More recently, the EU and the United Kingdom reached an FTA agreement in late December 2020, just days before the UK was set to leave the EU. The deal`s implementation ensures that trade between the two parties is tariff-free and quota-free, promoting continued economic growth.
In addition to these agreements, several other free trade agreements are currently being negotiated. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is one such agreement that has generated considerable interest. The CPTPP expands the Trans-Pacific Partnership (TPP), which was signed in 2016 but never ratified, to include 11 countries that account for about 13% of the world`s GDP. The CPTPP`s standard of reducing tariffs on goods and services is expected to have a positive impact on members` economies.
In conclusion, the free trade agreement is a critical tool for promoting economic growth, and updates and new agreements are emerging in the post-COVID-19 era. These agreements provide opportunities for businesses to access new markets, increase revenue and profits, and create jobs. With the increasing importance of international trade in the global economy, it`s essential to stay up-to-date on the latest FTA developments to benefit from these opportunities.