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 characterized by member countries eliminating tariffs on goods traded between them, while each country maintains its own tariffs towards non-members. In this scenario, France and Italy have eliminated tariffs between them but maintain different tariffs towards Japan, indicating that they are part of a free trade area, not a customs union, common market, or economic union.

Suppose That Steel from Japan Faces a 20 Percent Tariff