NAFTA creates a free trade area,as opposed to a customs union or a common market,due to the fact that:

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NAFTA (North American Free Trade Agreement) primarily focuses on eliminating tariffs and reducing trade barriers among the member countries (the United States, Canada, and Mexico), which promotes economic growth. This is a characteristic feature of a free trade area. Unlike a customs union or a common market, NAFTA does not involve common external tariffs against non-members or fully allow for the free movement of labor and capital among the member countries.

NAFTA Creates a Free Trade Area,as Opposed to a Customs