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Preferential Trade Area
Preferential trade area occurs where there is reduced protectionism on a number of select goods/services amongst the countries involved. This could just be between two countries i.e. bilateral trade agreement.
A preferential trade area is a group of countries that agree to reduce tariffs and other trade barriers on certain goods and services among themselves, while maintaining their own barriers against imports from non-member countries. The goal of a preferential trade area is to encourage trade among member countries and boost their economic development.
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Key Diagrams - Import Tariffs
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