Two or more countries that have eliminated tariff and most non-tariff barriers affecting trade among them, while each participating country applies its own independent schedule of tariffs to imports from non-member countries An example is the European Free Trade Association (EFTA) Free trade areas are governed by GATT Foreign trade zones or FTZs are the U S form of free trade areas Free trade zones (sometimes called "customs free" or "duty free" zones) is a generic term referring to special commercial and industrial areas where special customs procedures allow importation of foreign merchandise without the requirement that duties be paid immediately
A free trade area is a group of countries among which goods pass free of trade barriers but which does not adopt a common external tariff regime As such, the EC is a customs union, but NAFTA is a free-trade area because the external trade barriers of Canada, Mexico and the US were not harmonized
A free trade area is a cooperative arrangement among two or more nations, pursuant to the General Agreement on Tariffs and Trade, whereby trade barriers are removed among the members The arrangement generally includes a customs union with a common external tariff, although there are exceptions in which members maintain individually separate tariff schedules for external countries Extensive economic analysis of WTO, NAFTA, and FTAA is available