Sovereign nations join together, usually on a regional scale, to create free trade agreements. Free trade agreements are created to lower trade barriers and to stimulate trade between member countries. Member countries belonging to the free trade area trade freely with each other while maintaining trade barriers and tariffs for non-member countries. Free trade agreements are seen as having a positive impact on economic growth, especially for the smaller countries in the agreement. Trading blocs are groups of countries that have reached a common agreement to lower trade barriers throughout the group (e.g., NAFTA, ASEAN, and the European Union).

History

According to the Congressional Budget Office, since the end of World War II there has been significant support, especially from the United States, to eliminate artificial trade barriers and to support a greater liberalization of international trade...