Free-Trade Area Definition

A free-trade area is a region where trade barriers have been lowered or removed so that goods and services can flow freely between participating countries. The most well-known free-trade area is the North American Free Trade Agreement (NAFTA), which was established in 1994 and includes the United States, Canada, and Mexico.

Other notable free-trade areas include the European Union (EU), the Association of Southeast Asian Nations (ASEAN), and the Gulf Cooperation Council (GCC). Free-trade areas can be created through regional trade agreements or by unilateral decision of a country to lower its trade barriers.