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International Trade vocabulary · Trade Agreements and Policy

Free trade agreement

Meaning in international trade, with examples

nounCore term

In international trade, free trade agreement means: An agreement between two or more countries to remove or reduce customs duties and other barriers on most of the goods traded between them.

In Turkish: serbest ticaret anlaşması, STA

How it is used

Shortened to FTA. Each member keeps its own tariffs towards non-members, which is the main difference from a customs union. To benefit, goods must meet the agreement's rules of origin and travel with proof of origin such as an EUR.1 or an origin declaration.

Example sentences

  1. Thanks to the free trade agreement, our products enter South Korea duty-free.

  2. Check whether the free trade agreement also covers agricultural products.

Common collocations

  • sign a free trade agreement
  • under the free trade agreement
  • free trade agreement partner
  • benefit from a free trade agreement
  • customs unionAn agreement in which member countries remove customs duties between themselves and apply the same common tariff to imports from outside.
  • rules of originThe criteria used to decide which country a product comes from, especially when it contains materials or work from several countries.
  • preferential tariffA lower customs duty rate, sometimes zero, given to goods from certain countries under a trade agreement or a development programme.
  • EUR.1A movement certificate that proves the preferential origin of goods so they can enter a partner country at a reduced or zero duty under a trade agreement.
  • WTOWorld Trade Organization: the international organization based in Geneva that sets the rules for trade between its member countries and helps settle trade disputes.

More terms: Trade Agreements and Policy

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