![]() ![]() These countries are eliminating trade barriers among themselves but have also agreed to some common set of policies for dealing with nonmember countries. An example is Customs union of Russia, Belarus and Kazakhstan, which was formed in 2010. This is the third type of trade bloc, under which the member countries not only eliminate internal trade barriers, but also adopt common policies on how to deal with non-member countries. However, each member maintains independent policy while dealing with other countries. An example of a free trade agreement is NAFTA (North American Free Trade Agreement) under which Canada, Mexico and the US have agreed to eliminate the barriers among themselves. These members will continue to maintain independent trade policies with non-member countries. So, all members are free to import and export goods and services among themselves. The next level of commitment is the free trade area where all the trade barriers among the members are removed. ![]() Such an agreement does not address how individual members will deal with the non-members. Here the members lower the trade barriers but do not eliminate the barriers among themselves. Preferential trade areas have the lowest level of commitment to the reduction of trade barriers. ![]()
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