Question

A _____ 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.

Answer 1

A Free Trade Agreement (FTA) is a pact between countries to lessen or remove trade barriers like tariffs and non-tariff barriers while keeping their own tariffs for outside countries.

Step-by-step explanation:

A Free Trade Agreement (FTA) 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.

The North American Free Trade Agreement (NAFTA), for instance, is a well-known trade agreement between Canada, the United States, and Mexico that removes trade barriers like tariffs between the nations.

Aside from lowering tariffs, FTAs also address import quotas and various nontariff barriers which can include a range of conditions such as rules, regulations, inspections, and paperwork that can otherwise make importing products more costly or difficult.