Free trade area

A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers—import quotas and tariffs— and to increase trade of goods and services with each other. If people are also free to move between the countries, in addition to FTA, it would also be considered an open border. It can be considered the second stage of economic integration.

Description

Unlike a customs union (the third stage of economic integration), members of a free-trade area do not have a common external tariff, which means they have different quotas and customs, as well as other policies with respect to non-members. To avoid tariff evasion (through re-exportation) the countries use the system of certification of origin most commonly called rules of origin, where there is a requirement for the minimum extent of local material inputs and local transformations adding value to the goods. Only goods that meet these minimum requirements are entitled to the special treatment envisioned by the free trade area provisions.

Trade agreement

A trade agreement (also known as trade pact) is a wide ranging tax, tariff and trade treaty that often includes investment guarantees. The most common trade agreements are of the preferential and free trade types are concluded in order to reduce (or eliminate) tariffs, quotas and other trade restrictions on items traded between the signatories.

Classification of trade pacts

By number and type of signatories

A trade agreement is classified as bilateral (BTA) when signed between two sides, where each side could be a country (or other customs territory), a trade bloc or an informal group of countries (or other customs territories). A trade agreement signed between more than two sides (typically neighboring or in the same region) is classified as multilateral.

By level of integration

There are a variety of trade agreements; with some being quite complex (European Union), while others are less intensive (North American Free Trade Agreement). The resulting level of economic integration depends on the specific type of trade pacts and policies adopted by the trade bloc:

Free trade

Free trade is a policy followed by some international markets in which countries' governments do not restrict imports from, or exports to, other countries. Free trade is exemplified by the European Economic Area and the North American Free Trade Agreement, which have established open markets. Most nations are today members of the World Trade Organization (WTO) multilateral trade agreements. However, most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. Other barriers that may hinder trade include import quotas, taxes, and non-tariff barriers, such as regulatory legislation.

Features of free trade

Free trade policies generally promote the following features:

Noam Chomsky

Avram Noam Chomsky (/ˈnoʊm ˈtʃɒmski/; born December 7, 1928) is an American linguist, philosopher, cognitive scientist, historian, logician, social critic, and political activist. Sometimes described as "the father of modern linguistics," Chomsky is also a major figure in analytic philosophy, and one of the founders of the field of cognitive science. He has spent most of his career at the Massachusetts Institute of Technology (MIT), where he is Institute Professor Emeritus, and is the author of over 100 books, primarily on politics and linguistics. Ideologically, he aligns with anarcho-syndicalism and libertarian socialism.

Born to a middle-class Ashkenazi Jewish family in Philadelphia, Chomsky developed an early interest in anarchism from alternative bookstores in New York City. At the age of sixteen he began studies at the University of Pennsylvania, taking courses in linguistics, mathematics, and philosophy. He married fellow linguist Carol Schatz in 1949. From 1951 to 1955 he was appointed to Harvard University's Society of Fellows, where he developed the theory of transformational grammar for which he was awarded his doctorate in 1955. That year he began teaching at MIT, in 1957 emerging as a significant figure in the field of linguistics for his landmark work Syntactic Structures, which laid the basis for the scientific study of language, while from 1958 to 1959 he was a National Science Foundation fellow at the Institute for Advanced Study. He is credited as the creator or co-creator of the universal grammar theory, the generative grammar theory, the Chomsky hierarchy, and the minimalist program. Chomsky also played a pivotal role in the decline of behaviorism, being particularly critical of the work of B. F. Skinner.

Max Keiser

Timothy Maxwell "Max" Keiser (born January 23, 1960) is an American broadcaster and film maker. He hosts Keiser Report, a financial program broadcast on Russian state media channel RT that features fringe economic theories. Until November 2012, Keiser anchored On the Edge, a program of news and analysis hosted by Iran's Press TV. He hosted the New Year's Eve special The Keiser's Business Guide to 2010 for BBC Radio 5 Live. Keiser presented a season of The Oracle with Max Keiser on BBC World News. He produced and appeared in the TV series People & Power on the Al-Jazeera English network. He presents a weekly show about finance and markets on London's Resonance FM, and writes for The Huffington Post. He currently lives in London.

Early career

Keiser grew up in Westchester County, New York. After studying theatre at New York University, he took a variety of jobs including stand-up comedy and on radio. He then took a part-time job as a stock broker in the 1980s at Paine Webber and Oppenheimer and Co. Inc. (at their midtown office under David Tufts, across from Hurleys), at a time when it "required no talent whatsoever to make gobsmacking amounts of money".