Free trade is a crucial aspect of international commerce, and many countries have entered into free trade agreements to boost economic growth and create new business opportunities. These agreements eliminate tariffs and other barriers to trade, allowing goods and services to flow freely between participating nations.
Here are some of the major free trade agreements currently in force around the world.
North American Free Trade Agreement (NAFTA)
The NAFTA is a trade agreement between Canada, Mexico, and the United States. It was signed in 1994 and is one of the largest free trade agreements in the world. NAFTA has created a massive integrated market with a combined GDP of over $20 trillion. The agreement has led to increased trade, investment, and job growth across North America.
European Union (EU)
The European Union is a political and economic union of 27 member states located primarily in Europe. The EU has the largest economy in the world, with a GDP of over $18 trillion. The EU operates as a single market with no tariffs on goods and services between member countries. The EU has also negotiated free trade agreements with several other countries, including Canada, Japan, South Korea, and Singapore.
Trans-Pacific Partnership (TPP)
The TPP was a free trade agreement between 12 Pacific Rim countries, including the United States, Canada, Mexico, Japan, and Australia. The agreement aimed to create a high-standard, comprehensive free trade area in the Asia-Pacific region. However, the US withdrew from the agreement in 2017, and the remaining 11 countries signed a revised version of the deal known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
African Continental Free Trade Area (AfCFTA)
The AfCFTA is a free trade agreement between 54 African countries. It was signed in 2018 and came into force in 2021. The agreement aims to create a single market for goods and services across the continent, with the potential to create a market of 1.3 billion people and a combined GDP of over $3.4 trillion.
Regional Comprehensive Economic Partnership (RCEP)
The RCEP is a free trade agreement between 15 countries in the Asia-Pacific region, including China, Japan, South Korea, Australia, and New Zealand. The agreement was signed in November 2020 and covers a market of 2.2 billion people with a combined GDP of $26.2 trillion. The RCEP aims to reduce tariffs, streamline trade rules, and increase investment flows between member countries.
In conclusion, free trade agreements have become increasingly popular in recent years as countries strive to boost economic growth and create new business opportunities. The above-listed agreements are some of the major free trade agreements currently in force and are expected to have a significant impact on the global economy in the years to come.