Or there are guidelines that exempt certain products from duty-free status to protect domestic producers from foreign competition in their industries. For more than two decades, NAFTA has supported jobs and the U.S. economy. Successful NAFTA update negotiations should not reduce the many benefits that this U.S. trade agreement has already put in place. A free trade agreement (FTA) or treaty is a multinational agreement under international law to create a free trade area between cooperating states. Free trade agreements, a form of trade pacts, set tariffs and tariffs on imports and exports by countries, with the aim of reducing or removing barriers to trade and thereby promoting international trade.  These agreements „generally focus on a chapter with preferential tariff treatment,“ but they often contain „trade facilitation and regulatory clauses in areas such as investment, intellectual property, public procurement, technical standards, and health and plant health issues.“  In the first two decades of the agreement, regional trade increased from about $290 billion in 1993 to more than $1 trillion in 2016. Critics are divided on the net impact on the U.S. economy, but some estimates amount to 15,000 a year. It is also important to note that a free trade agreement is a reciprocal agreement. which is authorized by Article XXIV of the GATT. Autonomous trade agreements for developing and least developed countries are permitted by the 1979 decision by the signatories of the General Agreement on Tariffs and Trade (GATT) („empowerment clause“) on differentiated and more favourable treatment, reciprocity and increased participation of developing countries.
It forms the legal basis for the WTO`s Generalized Preference System (GSP).  Free trade agreements and preferential trade agreements (as mentioned by the WTO) are considered an exception to the MFN principle.  There are currently a number of free trade agreements in the United States. These include multi-nation agreements such as the North American Free Trade Agreement (NAFTA), which includes the United States, Canada and Mexico, and the Central American Free Trade Agreement (CAFTA), which includes most Central American nations. There are also separate trade agreements with nations, from Australia to Peru. The Doha Round would have been the world`s largest trade agreement if the United States and the EU had agreed on a reduction in their agricultural subsidies. As a result of its failure, China has gained ground on the world`s economic front through cost-effective bilateral agreements with countries in Asia, Africa and Latin America. The largest multilateral agreement is the agreement between the United States, Mexico-Canada (USMCA, formerly the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico.