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Free Trade Agreements and India
Yojana Magazine, February Issue


Countries are are looking for opportunities to expand their export markets through free trade agreements. This has gathered momentum over the last two decades. The urgency for improving the economic fortunes of domestic stakeholders, whether producers, consumers or intermediaries, is stronger in the developing world, as their trade liberalisation policies are becoming more and linked with economic growth and poverty reduction strategies – two most important items of their development discourse.

As of November 2011, the number of Free Trade Agreements (FTAs) notified under the World Trade Organisation has reached 505.

An FTA facilitates enforcement of legally binding commitments made by its member nations, either to sequentially reduce or completely eliminate various types of trade barriers facing each other, but keep those facing non-member nations intact.

Thus, FTA members gain an advantage in accessing each other’s markets compared to non-members. The degree of coverage of barriers and traded sectors varies depending on the type of FTA formed. Most basic form is known as preferential trade agreements.

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