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Free Trade Agreements: What You Should Know for Your Small Business Exports

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Free Trade Agreements: What You Should Know for Your Small Business Exports

By kmurray, Contributor and Moderator
Published: May 19, 2014

Interested in exporting your small business’s goods or services outside the United States? Have you heard of free-trade agreements? Here’s what you should know about how they can benefit you in the exporting process.

What is a free-trade agreement?

A free-trade agreement, or FTA, is an agreement between two or more countries where the countries agree to take steps to make trade between the countries’ businesses easier and faster.  FTAs reduce trade tariffs and non-tariff barriers, such as import quotas, and also cover protections for investors and intellectual property rights.

For the United States, the main goals of trade agreements are to:

  • Reduce barriers to U.S. exports
  • Protect U.S. interests competing abroad
  • Enhance the rule of law in the FTA partner country or countries

Ultimately, it’s easier and cheaper for U.S. companies to export to these trading partner markets, because  FTAs help create a more stable and transparent trading and investment environment, which reduces risks for you as a small-business exporter.

With which countries does the U.S. have an FTA?

As of January 1, 2014, the United States has 14 FTAs in force with 20 countries:

  • Australia
  • Bahrain
  • Chile
  • Colombia
  • DR-CAFTA: Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, & Nicaragua
  • Israel
  • Jordan
  • Korea
  • Morocco
  • NAFTA: Canada & Mexico
  • Oman
  • Panama
  • Peru
  • Singapore

Other benefits of FTAs

Some other kinds of benefits often found in FTAs are:

  • The ability for a U.S. company to bid on certain government contracting opportunities in the FTA partner country
  • The ability for a U.S. investor to get prompt, adequate and effective compensation if its investment in the FTA partner country is taken away by the government
  • The ability for U.S. service suppliers to supply their services in the FTA partner country
  • Protection and enforcement of American-owned intellectual property rights in the FTA partner country
  • The ability for U.S. exporters to participate in the development of product standards in the FTA partner country

Learn more at Export.gov and find out what else you should know about exporting by exploring the resources below!

Related Resources

About the Author:

Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

Comments:

Is it the same kind of FTA now going to be with EU?
Thanks great article will be reading more into this
I'm pretty excited about the free trade agreement. I've been doing dropshipping for a while. This year, I'm looking to export goods from the U.S. to several Asian countries. This is a great reference point, great find!
thanks so much for the article!
That is a Good news. This does not apply to my business directly as I sell software to e-merchants to enhance their online store performance. But yes indirectly it will as it will increase my customer's business and that will effect mine too.
thanks so much for the article
Thanks Very good.
Thank you for sharing your information helped me a lot!
I agree with the comments you have made
Free Trade Agreements help traders and small entrepreneurs in expanding the business network, but on 1 January 2014 only covers the 13 states only, if the program will run also to other countries in Asia such as Indonesia and Malaysia?

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