Final answer:
A trade agreement is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.
Step-by-step explanation:
A trade agreement is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries. One example of a trade agreement is the North American Free Trade Agreement (NAFTA) which is a trade agreement between Canada, the United States, and Mexico that eliminates trade barriers, such as tariffs, between each nation.
Trade agreements are important for promoting international trade and economic cooperation. They help to create a more favorable business environment by reducing trade barriers and increasing market access for goods and services. By eliminating or reducing tariffs and non-tariff barriers, trade agreements can stimulate economic growth and enhance the overall welfare of participating countries.
Some other examples of trade agreements include the Trans-Pacific Partnership (TPP), the European Union (EU), and the Association of Southeast Asian Nations (ASEAN).