WORLD HISTORY

Detailed explanation-1: -A free trade area is a group of countries that have agreed to mutually lower or eliminate trade barriers for trade within the area. This allows participating countries to benefit from reduced tariffs, while maintaining their existing protections for trade with countries outside of the area.

Detailed explanation-2: -A common market is a formal agreement where a group is formed amongst several countries that adopt a common external tariff. In a common market, countries also allow free trade and free movement of labor and capital among the members of the group.

Detailed explanation-3: -Free trade, usually defined as the absence of tariffs, quotas, or other governmental impediments to international trade, allows each country to specialize in the goods it can produce cheaply and efficiently relative to other countries. Such specialization enables all countries to achieve higher real incomes.

Detailed explanation-4: -In a free-trade area without harmonized external tariffs, to eliminate the risk of trade deflection, parties will adopt a system of preferential rules of origin. The term free-trade area was originally meant by the General Agreement on Tariffs and Trade (GATT 1994) to include only trade in goods.

Detailed explanation-5: -A Common Market is an agreement between two or more countries removing all trade barriers between themselves, establishing common tariff and non-tariff barriers for importers, and also allowing for the free movement of labour, capital and services between themselves.