Free trade agreements (FTAs) improve foreign market access for exporters, promote economic growth and create jobs. I touched on this with "Trade Policy Made Easy." Below is an overview of several free trade agreements, as listed on the International Trade Administration website. If you are considering or currently exporting to any of the following countries, you should look into how an FTA will benefit your organization.
The United States-Australia FTA entered into force on January 1, 2005. Under the FTA, more than 99 percent of U.S. exports of manufactured goods are now duty-free.
Upon entry into force of the United States-Bahrain Free Trade Agreement (FTA) in August 2006, 100 percent of bilateral trade in consumer and industrial products became duty free. Bahrain will phase out tariffs on the remaining handful of agricultural product lines by 2015.
3. United States-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) - Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic
On August 5, 2004, the United States signed the United States- Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic.
The CAFTA-DR is the first free trade agreement between the United States and a group of smaller developing economies. This agreement is creating new economic opportunities by eliminating tariffs, opening markets, reducing barriers to services, promoting transparency, and establishing state-of-the-art rules for 21st century commerce. It is facilitating trade and investment among the Parties and furthering regional integration.
The United States-Chile Free Trade Agreement (FTA) entered into force on January 1, 2004. Under the FTA, the Parties eliminated tariffs on 87 percent of bilateral trade immediately and will establish duty free trade in all products within a maximum of 12 years.
Chile has one of the most open trade regimes in the world. The uniform applied tariff rate for virtually all goods is 6 percent.
Under the United States-Israel Free Trade Area Agreement (FTA), signed in 1985, the United States and Israel agreed to implement phased tariff reductions culminating in the complete elimination of duties on all products by January 1, 1995.
Most tariffs between the United States and Israel have been eliminated as agreed, although tariff and nontariff barriers continue to affect a certain portion of U.S. agricultural exports.
The United States-Jordan Free Trade Area Agreement (FTA) entered into force on December 17, 2001. Under the terms of the agreement, both countries agreed to phased tariff reductions culminating in the complete elimination of duties on nearly all products by 2010.
The United States-Morocco Free Trade Agreement (FTA) entered into force on January 1, 2006, eliminating duties on more than 95 percent of all goods and services. In addition to key U.S. export sectors gaining immediate duty-free access to the Moroccan market, the Agreement includes commitments by Morocco for increased regulatory transparency and the protection of intellectual property rights.
8. North American Free Trade Agreement (NAFTA) -- United States, Canada and Mexico
On January 1, 1994, the North American Free Trade Agreement between the United States, Canada, and Mexico (NAFTA) entered into force.
All remaining duties and quantitative restrictions were eliminated, as scheduled, on January 1, 2008.
NAFTA created the world's largest free trade area, which now links 444 million people producing $17 trillion worth of goods and services.
The United States-Oman Free Trade Agreement (FTA) entered into force on January 1, 2009. Under the agreement, Oman provided immediate duty-free access on virtually all industrial and consumer products in its tariff schedule, and will phase out tariffs on the remaining handful of products within 10 years. On agricultural products, Oman provided immediate duty-free access for U.S. agricultural products in 87 percent of agricultural tariff lines.
Oman will phase out tariffs on the remaining products within 10 years.
The United States and Peru signed the United States-Peru Trade Promotion Agreement (PTPA) on April 12, 2006. Following approval by the U.S. Congress and the Congress of Peru, the PTPA entered into force on February 1, 2009. The PTPA is a comprehensive free trade agreement.
The PTPA will result in significant liberalization of trade in goods and services between the United States and Peru. Under the PTPA, Peru immediately eliminated most of its tariffs on U.S. exports, with all remaining tariffs phased out over defined time periods.
The United States and Singapore signed a Free Trade Agreement (FTA) on May 6, 2003, which entered into force on January 1, 2004. Since 2004, exports from the United States through 2008 increased 73 percent, with steady growth in exports of medical devices, machinery, and construction equipment. The United States and Singapore meet annually to review the implementation of the FTA and to seek to resolve outstanding trade issues.