How Does Free Trade Agreement (FTA) Contribute to Countries’ Economy?

Free Trade Agreement (FTA) has contributed to signatories’ economy differently through reducing tariffs, decreasing trade barriers, encouraging investments, and increasing exports and imports. It is a treaty between countries to permit access to their market. Domestic industries may be forced to become more competitive due to FTAs, reducing their reliance on government subsidies. It opens new markets, surges Gross Domestic Products (GDP), and attracts new investments. Free trade agreements between two nations improve commercial prospects for huge corporations and provide significant advantages to emerging SMEs and strengthen exporting SMEs. Because of the FTA, SMEs can export products to countries members of the FTA at a lower cost or no tariff. It increases the flow of new trade opportunities between companies of signatories.

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