Question

Explain why countries enter into free trade agreements. Provide the names of three trade agreements you have studied in this unit, and provide a brief description of each.

a) To restrict trade barriers.
b) To increase tariffs.
c) NAFTA, ASEAN, WTO - fostering economic cooperation.
d) GATT, EU, Mercosur - promoting global isolation.

Answer 1

Countries enter into free trade agreements to reduce trade barriers, foster economic cooperation, or promote global integration.

Step-by-step explanation:

Countries enter into free trade agreements for various reasons:

1. To restrict trade barriers: Free trade agreements aim to reduce or eliminate barriers to trade, such as tariffs, quotas, and other restrictions, in order to promote more open and efficient international trade.
2. To foster economic cooperation: Trade agreements like NAFTA, ASEAN, and WTO are examples of agreements that encourage economic cooperation between countries. They establish rules and mechanisms for resolving trade disputes and promote the exchange of goods and services.
3. To promote global isolation: GATT, EU, and Mercosur are examples of trade agreements that promote regional or global integration rather than isolation. These agreements aim to create larger markets and promote economic and political cooperation among member countries.