Advantages of a Free Trade Area

A free trade area offers several advantages, including:

1. Increased efficiency

The good thing about a free trade area is that it encourages competition, which consequently increases a country’s efficiency, in order to be on par with its competitors. Products and services then become of better quality at a lower cost.

2. Specialization of countries

When there is intense competition, countries will tend to produce the products or goods that they are most efficient at. Efficient use of resources means maximizing profit.

3. No monopoly

When there is free trade, and tariffs and quotas are eliminated, monopolies are also eliminated because more players can come in and join the market.

4. Lowered prices

When there is competition, especially on a global level, prices will surely go down, allowing consumers to enjoy a higher purchasing power.

5. Increased variety

With imports becoming available at a lower cost, consumers gain access to a variety of products that are inexpensive.