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What is the meaning of free trade zone?
A free trade zone is any location where goods can be shipped, handled, manufactured, reconfigured, and re-exported without the involvement of customs agencies.
The FTA’s main goals are to bring down barriers in trading, specifically tariffs and import quotas, and encourage the free trade of goods and services among its member countries.
A major seaport, an international airport or a border facility between two or more countries may be designated a free trade zone.
FTZs are designated as outside of Customs requirements and laws, meaning that goods coming into these zones do not incur duties until they exit the zone.
100% Repatriation of Capital and Profits.
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.
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.
When there is competition, especially on a global level, prices will surely go down, allowing consumers to enjoy a higher purchasing power.
With imports becoming available at a lower cost, consumers gain access to a variety of products that are inexpensive.