Definition of a Free Trade Agreement
A Free Trade Agreement (FTA) is an international agreement which removes or reduces tariff and non-tariff barriers to trade and investment between partner countries.
Trade and investment barriers can make it more difficult and costly to trade or invest overseas. By removing or reducing them, FTAs can make it easier for businesses to export, import and invest. They can also benefit consumers by providing a more diverse and affordable range of imported products.
FTAs may be multilateral, plurilateral, regional or bilateral:
– multilateral agreements are agreed by all members of the World Trade Organization (WTO);
– plurilateral or regional agreements are agreed by subsets of WTO members;
– bilateral agreements primarily relate to the liberalisation and regulation of trade and investment between the two signatories to the agreement.
FTAs differ from customs unions. Parties to an FTA maintain independence to set their own tariffs on imports from non-parties. By contrast, all signatories of a customs union commit to apply the same external tariff to non-signatories.
FTAs do not prevent governments from regulating in the public interest – for example, to protect consumers, the environment, animal welfare and health and safety. Equally, trade agreements do not require governments to privatise any service or prevent governments from expanding the range of services they supply to the public.
For example, the UK Government has been clear about its commitment to protecting public services, particularly including the NHS. No future free trade agreement would affect the fact that it would remain up to the UK and devolved governments to decide how to run our publicly funded health services
Read Full News Story » UK Free Trade Agreements After Brexit
