Free Trade Agreement Easy Definition
As we try to pursue New Zealand`s trade objectives through the World Trade Organization (WTO), which involves more than 160 economies, the WTO consensus process means that progress can be slow and agreements may not address the specific interests and issues of individual countries. Free trade agreements provide an additional way to advance our trade interests. As soon as the agreements go beyond the regional level, they need help. The World Trade Organization intervenes at this stage. This international body contributes to the negotiation and implementation of global trade agreements. In principle, free trade at the international level is no different from trade between neighbours, cities or states. However, it allows companies in each country to focus on the production and sale of goods that make the best use of their resources, while others import goods that are scarce or unavailable domesticly. This mix of local production and foreign trade allows economies to grow faster and, at the same time, better meet the needs of their consumers. Governments with free trade policies or agreements do not necessarily abandon import and export controls or eliminate all protectionist policies. In modern international trade, few free trade agreements lead to completely free trade.
The General Agreement on Tariffs and Trade (GATT 1994) originally defined free trade agreements that were to include only trade in goods.  An agreement with a similar purpose, namely the improvement of trade in services, is referred to as the “economic integration agreement” in Article V of the General Agreement on Trade in Services (GATS).  However, in practice, the term is now commonly used [by whom?] to refer to agreements that concern not only goods, but also services and even investments. Environmental provisions have also become increasingly common in international investment agreements, such as free trade agreements.  Free trade agreements can again undermine the importance of maintaining and implementing competition law, transparency and due process, with respect to provisions on competition policy cooperation and consultation/notification, particularly where anti-competitive behaviour may have affected trade and investment between countries. For example, New Zealand often attempts to introduce rules to restrict and discipline certain categories of subsidies that are of particular importance, including those that harm our export markets or harm the environment, such as fossil fuel subsidies or unsustainable fishing practices. These agreements between three or more countries are the most difficult to negotiate. The larger the number of participants, the more difficult the negotiations. They are, by nature, more complex than bilateral agreements, insofar as each country has its own needs and requirements. New Zealand wants to ensure that the rules of origin are neutral, which means that they do not favour input producers over producers of finished products or favour one industry over another.
We prefer the self-reporting of origin as the basis for the original research in the first instance under the free trade agreement.