Suppose that steel from Japan faces a 20 percent tariff in France and a 25 percent tariff in Italy, while France and Italy maintain free trade between each other.France and Italy are therefore part of a (an)

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A free trade area is a region where a group of countries agrees to reduce or eliminate trade barriers among themselves, but each country maintains its own external tariffs against non-member countries. France and Italy have free trade between each other but different tariffs for Japan, indicating a free trade area.

Suppose That Steel from Japan Faces a 20 Percent Tariff