Free Trade Area

A trading arrangement that removes all barriers to trade among participating nations but that allows each nation to retain its own restrictions on trade with countries outside the free trade area.

One of the most well known free trade areas was created because of the signing of the North American Free Trade Agreement (NAFTA). This agreement was made between Canada, the United States and Mexico and encourages trade between these North American countries. The agreement was signed on January 1, 1994 and has since created one of the world's largest free trade areas.

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