The purpose for developing free trade agreements
Free Trade Zone (Free trade area) (FTA) – is a type of international integration, in which participating countries abolished customs duties, taxes and fees, as well as quantitative restrictions in mutual trade in accordance with international treaties. This is a deeper type of integration than the preferential agreements. For each member country retains the right to self-determination and independent trade regime towards third countries. In most cases, the condition of a free trade applies to all products except agricultural products. Free trade area can be coordinated interstate small secretariat, located in one of the member countries, but usually gets along without it, and the main parameters of the development of the country agree on the periodic meetings of heads of agencies. Among the member countries remain the customs borders and positions that control the origin of goods across their borders. There are many benefits for the society because of the free trade agreements, which erase the borders and help countries to cooperate, according to Free Trade Agreements (2011).
According to Free Trade Agreements Between Developing and Industrialized Countries (2002), there are different free trade agreements that are implemented in the international relations. Among them are The North American Free Trade Area, European Free Trade Association, Central European Free Trade Agreement, Australia-New Zealand trade pact on the deepening economic ties, Free trade area between Colombia, Ecuador and Venezuela, and Bangkok Agreement.
The North American Free Trade Area – NAFTA – is an Agreement between the United States, Canada and Mexico, which came into effect from 1994 agreement, and provides certain tariff barriers for industrial and agricultural goods, protection of intellectual property rights, the establishment of common rules for investment, liberalization of trade in services and an effective mechanism to resolve trade disputes among member countries; European Free Trade Association – in 1960 an agreement between Iceland, Liechtenstein, Norway and Switzerland; Baltic free trade zone – an agreement between Latvia and Lithuania, signed in 1993 (repealed in 2004, from the date of the participating countries in the European Union); Central European Free Trade Agreement – an agreement between Hungary, Poland, Romania, Slovakia, Slovenia and the Czech Republic, signed in 1992 (repealed in 2004, from the date of the participating countries in the European Union); Australia-New Zealand trade pact on the deepening economic ties – signed by the two countries in 1983; Free trade area between Colombia, Ecuador and Venezuela – an agreement was signed by the listed countries in 1992; Bangkok Agreement – an agreement between Bangladesh, India, Republic of Korea, Laos, Sri Lanka, signed in 1993, according to Free Trade Agreements (2010).
The purpose for developing free trade agreements is to make countries closer and to give certain opportunities to the countries to make a fair trade with the other countries. Free trade agreements provide countries with the corresponding possibilities and opportunities to receive benefits and get perspectives. As a fact, the establishment of free trade represents threats and opportunities for global corporations that are interested in the simplified free trade agreements. There are different situations that occur as a result of the trade. But still, nowadays the trade is an extremely important tool in the relationships between countries. Obviously, there are advantages and disadvantages of the cooperation between countries and of the agreements concluded.