Free Trade Agreement (FTA)

Definition and legal framework

A Free Trade Agreement (FTA) is an international treaty whereby the parties commit to reducing or eliminating customs duties and non-tariff barriers on substantially all their reciprocal trade. Such agreements are authorised under GATT Article XXIV, provided they cover "substantially all trade" and do not raise barriers against third countries.

EU Free Trade Agreements

The EU has an extensive FTA network covering more than 70 partner countries. Key agreements include:

• CETA (Canada): provisionally applied since 2017
• EU-Japan EPA (JEFTA): in force since 2019
• EU-Mercosur: concluded in December 2024
• EU-New Zealand: in force since 2024

Practical use

To benefit from an FTA, exporters must demonstrate preferential origin according to the specific rules of the agreement. Proof of origin varies:

• Origin attestation by the exporter (modern trend, e.g. CETA)
• EUR.1 certificate or EUR-MED (Mediterranean agreements)
• Invoice declaration for approved exporters

Common pitfalls

• Each FTA has its own rules of origin: do not apply rules from one agreement to another
• Cumulation of origin (diagonal, full) varies across agreements
• Certain products are excluded from preferences (often sensitive agricultural goods)
• Validity periods for proofs of origin must be strictly observed
• The WTO's Regional Trade Agreements Information System (RTA-IS) provides a database of all notified FTAs