Free Trade Agreements
Trade agreements help to open markets and to expand opportunities for American workers and businesses, and can help U.S. companies enter and compete more easily in the global marketplace.
Trade agreements also strengthen the business climate by including commitments on the reduction and elimination of tariffs and the elimination of a variety of non-tariff barriers that restrict or distort trade flows.
The United States is party to the following trade agreements:
U.S.-Panama (not yet implemented)
U.S.-Australia Free Trade Agreement
The Agreement entered into force on January 1, 2005. At that time, tariffs that averaged 4.3 percent were eliminated on more than 99 percent of the tariff lines for U.S. manufactured goods exports to Australia. Exports of such goods account for 93 percent of total U.S. goods sales in Australia's market.U.S.-Bahrain Free Trade Agreement
The Agreement entered into force on August 1, 2006. All bilateral trade in industrial and consumer products become duty-free immediately upon entry into force of the Agreement. In addition, Bahrain and the United States will provide each other immediate duty-free access on virtually all products in their tariff schedules and will phase out tariffs on the remaining handful of products within ten years.
Central American/Dominican Republic FTA (CAFTA/DR)
The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA/DR) entered into force between the United States and Costa Rica on January 1, 2009, between the United States and the Dominican Republic on March 1, 2007, between the United States and Guatemala on July 1, 2006, between the United States and Honduras and Nicaragua on April 1, 2006, and between El Salvador and the United States on March 1, 2006.
More than 80 percent of U.S. exports of consumer and industrial goods became duty-free upon implementation, with remaining tariffs phased out over 10 years. Under the U.S. Caribbean Basin Trade Partnership Act, many products from Central America already entered the United States duty free. The CAFTA/DR consolidated those benefits and made them permanent, so that nearly all consumer and industrial products made in Central America now enter the U.S. duty free.
North American Free Trade Agreement (NAFTA)
The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico (NAFTA) entered into force on January 1, 1994. All remaining duties and quantitative restrictions were eliminated, as scheduled, on January 1, 2008.
U.S.-Chile Free Trade Agreement
The U.S.-Chile Free Trade Agreement entered into force on January 1, 2004. At that time, more than 85 percent of two-way trade in consumer and industrial goods became duty-free. Duties on other products will gradually be phased out over a 12-year period.
U.S.-Israel Free Trade Agreement
The U.S-Israel Free Trade Agreement entered into force on September 1, 1985. The elimination schedule for tariff rates was fully implemented as of January 1, 1995.
U.S.-Jordan Free Trade Agreement
The U.S.-Jordan Free Trade Agreement entered into force on December 17, 2001. The agreement eliminates tariffs on U.S. and Jordanian goods over a ten-year period; however, most products will become duty-free well before 2011.
U.S.-Morocco Free Trade Agreement
The U.S.-Morocco Free Trade Agreement entered into force on January 1, 2006. When the agreement entered into force, 95 percent of qualifying U.S.-manufactured consumer and industrial goods immediately became duty free. Duties on most remaining qualifying products are being phased out over a period of as much as nine years. For a limited number of products, tariffs are being phased out over a period of as much as 15 years.
U.S.-Oman Free Trade Agreement
The U.S.-Oman Free Trade Agreement entered into force on January 1, 2009. Oman is the fifth country in the Middle Eastern region to have successfully negotiated a bilateral free trade agreement with the United States. All bilateral trade in industrial and consumer products become duty-free immediately upon entry into force of the Agreement. In addition, Oman and the United States will provide each other immediate duty-free access on virtually all products in their tariff schedules and will phase out tariffs on the remaining handful of products within ten years.
U.S.-Peru Trade Promotion Agreement
The U.S.-Peru Trade Promotion Agreement was implemented on February 1, 2009. Under the terms of the agreement, 80 percent of U.S. exports of consumer and industrial products to Peru became duty-free immediately, with remaining tariffs phased out over 10 years.
U.S.-Singapore Free Trade Agreement
The U.S.-Singapore FTA entered into force on January 1, 2004. The Agreement provided for the immediate elimination of all duties on U.S products. Most U.S. tariffs on Singaporean goods were eliminated immediately upon entry into force of the Agreement, with remaining tariffs phased out over 3-10 years.
U.S.-Colombia Trade Promotion Agreement
The United States and Colombia signed the United States-Colombia Trade Promotion Agreement in November 2006 and a Protocol of Amendment in June 2007. The Agreement was implemented on May 15, 2012.
U.S.-Korea Free Trade Agreement
The United States and the Republic of Korea signed the United States-Korea Free Trade Agreement (KORUS FTA) on June 30, 2007. The United States and the Republic of Korea implemented the agreement on March 15, 2012.
U.S.-Panama Trade Promotion Agreement (pending)
U.S. and Panama signed the United States-Panama Trade Promotion Agreement on June 28, 2007. Panama approved the agreement on July 11, 2007. The United States has not yet approved the agreement.