TLC is an acronym (a term formed by the initials of the words that make up a complex name of institutions, organizations, etc.) of the North American free trade agreement.
FTA or NAFTA is a trade agreement of binding character that signed two or more countries to regulate their trade relations, to increase trade and investment flows, to agree the granting of preferences for mutual tariff and non-tariff barriers decrease in regard to trade in goods and services.
Within a Treaty of this nature there are various regulatory aspects with regard to the trade. These range from access to new markets, intellectual property, investment, financial services, e-commerce, environmental provisions, solution of controversies, telecommunications, competition policy, labour issues, among others.
These treaties, in turn, have a nature of perpetuity, i.e. are in force for an indefinite period. Or until one of the Parties propose their termination or renegotiation. This is done through a procedure that is normally regulated by international law and the Treaty itself.
Economists believe that FTAS are part of a business strategy long term whereby you try to the consolidation of the markets for the products of the involved Nations. This of course, in addition to developing the possibility of offering products competitively at external level; at the internal level, it generates more occupation and employment.
However, it should be noted that not all the treaties are the same, and that they may vary in topics that include and the level of commitment by the countries that sign it. However, it is considered that they must at least contain procedures and rules with reference to the higher amount of goods that can be traded between the parties.
Among the benefits that has for a country to be part of a free trade agreement are:
-the reduction or elimination of tariff and non-tariff barriers in the marketing.
-the increase of foreign investment to give investors certainty and stability in time.
-the improvement of the competitiveness between companies.
-the creation of new jobs arising from the increase in export.
-the integration of the country into the world economy. This generates to reduce the level of country risk in the cases that are small and fragile countries in terms of its economy. And it also reduces the cost of financing of private activity.
However, there are also disadvantages, such as:
-protection of trade protection of certain sensitive products in the negotiation process.
Although these negative effects on certain products can be reduced if adequate measures are carried forward to achieve its competitiveness.
Usage examples and phrases
“China has signed with South Korea the most important FTA in its history”. Here, applies to the signature of such a treaty between the two countries.
“Thanks to the FTA signed by the three countries, trade between these Nations has tripled in two years”. Refers in this case to the increase of marketed products.
“Before signing the FTA with the United States, the Congress of the small nation has asked information about several of the clauses that make up”. In this example, used with the sense of the legal steps taken to ensure the effectiveness of the agreement for all parties.