Regional free trade agreements have expanded global trade.
The number of regional trade agreements has grown in the past two decades. A regional trade agreement refers to free trade among a number of nations in a specified area or region. Regional trade agreements regulate more than one half of global trade, according to the Inter-American Development Bank.
Trade Barriers
A free trade agreement lifts all trade barriers to trade and foreign investment. Member nations signing a regional trade agreement agree to eliminate trade tariffs on exports and imports. This promotes and increases trade among member nations of a free trade agreement bloc.
Existing Agreements
One of the largest regional free trade agreements is the North American Free Trade Agreement. NAFTA links the United States, Canada and Mexico in an accord that lifted trade barriers in the region. The three member nations implemented the agreement on Jan. 1, 1994, and trade between the nations has increased more than 200 percent, according to Export.gov.
WTO Rules
The World Trade Organization (WTO), with its 153 country members, acts as a regulatory organization, spelling out the guidelines for regional trade agreements. According to WTO figures, 193 regional trade agreements are in force as of 2010.
