A free trade area deals with the elimination of customs duties and the measures applied to Member States when they trade with each other. This means that there are no common guidelines applicable to all members and that each country in the free trade area collects its own customs duties and quotas. Since the time of the ancient Greeks, economists have studied and discussed the theories and effects of international trade policy. Do trade restrictions help or harm the countries that impose them? And which trade policy, from strict protectionism to free trade, is best for a given country? Years of debate about the benefits and costs of free trade policy for domestic industry have given rise to two dominant theories of free trade: mercantilism and comparative advantage. A free trade area (FTA) applies to a given region in which a group of countries in that region signs an agreement that seals economic cooperation between them. Under NAFTA, the heads of state of the United States, Canada and Mexico meet more often and attach greater importance to their diplomatic relations. The pros and cons of free trade agreements impact jobs, business growth, and living standards: NAFTA, the North American Free Trade Agreement, has eliminated many tariffs and other trade barriers between the United States, Mexico, and Canada. Since then, trade between the three countries has increased severalfold. But not everyone celebrated this development. Let`s look at the pros and cons of NAFTA. Opponents of free trade often claim that it encourages companies to set up in countries that have poor environmental and labor rules. These measures could lead to systematic work abuses and environmental destruction. For example, a coal company in the United States might have to pay workers a high minimum wage, enforce aggressive safety policies, and protect local rivers from pollution.
Free trade agreements could allow the mining company to relocate mining to a country without these rules, which would allow it to reduce costs by endangering workers and the environment. . . .