A Free Trade Agreement (FTA) is a legally binding agreement between two or more countries or trading blocs that aims to reduce or eliminate barriers to trade and investment between the participating parties. FTAs are designed to promote economic integration, foster international cooperation, and create opportunities for increased trade and investment flows.

Key Features:

1. Tariff Reduction or Elimination: FTAs typically involve the reduction or elimination of tariffs (import taxes) on goods traded between the participating countries. This helps lower the cost of imported goods and encourages increased trade volumes.

2. Non-Tariff Barriers: In addition to tariffs, FTAs may address non-tariff barriers to trade, such as quotas, import licensing requirements, technical standards, and sanitary and phytosanitary measures. By harmonizing regulations and standards, FTAs aim to facilitate trade and streamline customs procedures.

3. Market Access: FTAs provide improved market access for exporters by granting preferential treatment to goods originating from the participating countries. This can include lower tariffs, reduced administrative burdens, and simplified customs procedures, making it easier for businesses to access new markets.

4. Investment Protection: Many FTAs include provisions to protect foreign investments by establishing rules for the treatment of investors, intellectual property rights, and dispute resolution mechanisms. These provisions help create a more stable and predictable environment for investment.

5. Services and Intellectual Property: FTAs often address trade in services and intellectual property rights, aiming to promote greater liberalization and protection in these areas. This can benefit service providers, such as financial institutions, telecommunications companies, and professional services firms.

6. Trade Facilitation: FTAs may include provisions to enhance trade facilitation measures, such as customs cooperation, electronic customs clearance systems, and mutual recognition arrangements. These measures help reduce trade costs, enhance supply chain efficiency, and promote trade facilitation.

Overall, FTAs play a significant role in shaping global trade and economic relations by promoting open and competitive markets, fostering economic growth, and supporting job creation. They provide a framework for countries to strengthen their economic ties, expand market opportunities, and reap the benefits of international trade and investment.