Free zone or free trade zone, which in English is described as " free-trade zone ", is a term of great use in international trade, to describe the area or geographic zone of a certain country whose certain trade barriers such as quotas and tariffs are eliminated and bureaucratic procedures are reduced with the prospect of obtaining new exchanges and foreign businesses. This is a territory or nation in which a group of countries have made an agreement in order to reduce or eliminate trade barriers.
These countries eliminate trade barriers and possible restrictions that exist between them, but retain existing barriers to other countries that are outside the free trade zone. This is a work of intensity that implies the cost of raw material or components and the export of factory producer.
In free trade zones, the member countries are responsible among themselves for those border tariffs, the prices of articles and commercial products, which will be the same for each of the members of said zone, this means that a country does not have the possibility of increasing the price of products from another country that is part of the free trade zone.
It is important to mention that one of the first trade zones in the world was established by Shannon, Co. Clare; thanks to the Irish Government, which tried to promote employment in a rural area, and thus generate different income for the economy of that country, making use of small regions; event that turned out to be a success at that time and continues to function to this day.
On the other hand, with regard to Latin America, free zones were erected for the decades of the 20th century; where the first to manifest a free trade agreement were Argentina and Uruguay in 1920. Later, in 1960, the Latin American Integration Association was created, in the Montevideo Treaty, made up of Argentina, Brazil, Chile, Mexico, Paraguay, Peru and Uruguay. Other examples of free zones are: Mercosur, the European Union and the North American Free Trade Agreement NAFTA.
