Free trade areas (FTAs) are arrangements among two or more countries under which they agree to
eliminate tariffs and nontariff barriers on trade in goods among themselves. However, each
country maintains its own policies, including tariffs, on trade outside the region.
In the last few years, the United States has engaged or has proposed to engage in negotiations to
establish bilateral and regional free trade arrangements with a number of trading partners. Such
arrangements are not new in U.S. trade policy. The United States has had a free trade arrangement
with Israel since 1985 and with Canada since 1989, which was expanded to include Mexico and
became the North American Free Trade Agreement (NAFTA) effective in January 1994.
