Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners. Which of the following best describes the result of this behaviour?

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Quizplus · Accepted Answer

Free trade zones are areas where member countries have removed most trade barriers between them, such as import and export duties, quotas, and other regulations. This promotes trade among partner countries and encourages foreign investment. Preferred tariff pacts refer to agreements where countries agree to reduce tariffs on certain goods between them, but not necessarily all trade. Interaction zones and customary-duty areas do not accurately describe the result of forming free-trade associations.

Nations Sometimes Form Free-Trade Associations and Establish Areas Where There