Question

The growth of free trade areas that are tariff-free among members but have a common tariff for non-members creates an opportunity that can be capitalized on by direct investment.

a) True
b) False"

Answer 1

The growth of tariff-free trade areas with a common tariff for non-members creates opportunities for direct investment. Correct option is a)

Step-by-step explanation:

The statement is true.

Free trade areas that have a common tariff for non-members create opportunities for direct investment.

For example, the North American Free Trade Agreement (NAFTA) among Canada, the United States, and Mexico facilitated freer trade within the region by eliminating tariffs and import laws. This created investment opportunities as companies could set up operations in any of the member countries to take advantage of the tariff-free trade.