There are significant differences between unions and free trade zones. Both types of trading blocs have internal agreements that the parties enter into to liberalize and facilitate trade between them. The key difference between unions and free trade zones is their approach to third parties [lack of ambiguity needed]. While a customs union requires all parties to apply and maintain identical external tariffs on trade with non-parties, parties to a free trade area are not subject to such a requirement. Instead, they can set and maintain any customs regime for imports from non-parties, as they see as necessary.  In a free trade area without harmonized external tariffs, the parties will adopt a system of preferential rules of origin to eliminate the risk of trade diversion [necessary ambiguities].  Trade Treaties Map is a multilingual web tool that provides information on more than 270 multilateral and trade-related commercial contracts. It was designed primarily to help policy makers and ISTs optimize their country`s legal framework for international trade. But LegaCarta is also a global public good of the ITC, open to all and of particular interest to lawyers, lawyers, law professors, researchers, PhD students and university students. The “Commercial Law” unit implements the technical assistance programme at different levels, depending on the needs expressed by the country. Technical assistance can be provided in integrated form or as stand-alone modules.
The integrated form reaches the various levels of a legal framework: from policy makers to the ratification of important contracts, through knowledge of the treaties ratified in certain ministries (trade, foreign affairs, justice) and/or other relevant public institutions, trade promotion bodies such as chambers of commerce and exporting organisations, the academic community for the legal and economic world. For more information on the five training modules, click here. In general, trade diversion means that a free trade agreement would divert trade from more efficient suppliers outside the zone to less efficient suppliers within the territories. Whereas the creation of trade implies the creation of a free trade area that might not otherwise have existed. In any case, the creation of trade will increase a country`s national well-being.  The creation of free trade zones is seen as an exception to the nation`s most privileged principle (MFN) in the World Trade Organization (WTO), as the preferences that parties to a free trade area agree to each other go beyond their membership obligations.  Although GATT Article XXIV authorizes WTO members to establish free trade zones or to conclude interim agreements necessary for their establishment, there are several conditions relating to free trade zones or interim agreements leading to the creation of free trade zones. There is a wide range of statistical indicators (for example. B per capita trade, exports, average tariffs) Unlike a customs union, parties to a free trade agreement do not hold common external tariffs, i.e. apply different tariffs, as well as other policies towards non-members. This function allows non-parties to free themselves as part of a free trade agreement by entering the market with the lowest external tariffs.
Such a risk requires the introduction of rules for determining which products originate may be preferred under a free trade agreement, which is not necessary for the establishment of a customs union.  In principle, there is a minimum processing time leading to a “substantial processing” of the products, so they can be considered original products.