Customs
Free Trade Agreement (FTA)
A treaty between two or more countries that reduces or removes tariffs and other barriers on qualifying goods traded between them.
In depth
An FTA lowers or eliminates duty on goods that meet the agreement's origin rules, which can be the difference between a viable and an unviable trade lane. Claiming the benefit is not automatic: the importer must claim preference at entry and hold valid proof of origin, whether a certificate, a declaration on the invoice, or a registered exporter statement depending on the agreement. Many importers pay full duty simply because nobody checked whether an agreement applied. Regional agreements such as RCEP and the CPTPP cover much of the Asia-Pacific and are frequently underused.
Key points
- Reduces or removes tariffs on goods meeting the origin rules
- Preference must be claimed at entry with valid proof of origin
- Not automatic — unclaimed preference is simply lost
- Major regional agreements include RCEP, CPTPP, and ASEAN pacts