Final answer:
A free trade zone, or special economic zone (SEZ), is a geographical region where traditional taxation, labor, and environmental regulations do not apply, designed to make businesses more competitive in international markets.
Step-by-step explanation:
A geographical region where taxation, labor, and environmental regulations do not apply to the production of either light or heavy industry goods is known as a free trade zone or a special economic zone (SEZ). This type of zone usually has access to a port, and the government offers various benefits such as not taxing trade. This policy is in stark contrast to nontariff barriers, which are measures other than tariffs that governments enact to make imported goods more costly or difficult, often with the intent of protectionism. A free trade zone seeks to reduce the limitations on trade, unlike protectionism which restricts the flow of trade using methods like tariffs, import quotas, or non-tariff barriers. In the context of international trade, free trade zones can help reduce production costs, enabling firms to sell their products more competitively in a global market.