While researching import or export opportunities for goods and services, you’ll probably run across references to “free trade agreements.” Although you can trade with businesses in almost any country, growing small- and mid-sized businesses usually find it easier to begin by trading with partners that participate in free trade agreements with the United States.
A free trade agreement basically allows businesses in member countries to break down trade barriers, enjoy a more transparent and stable trading environment, and take advantage of reduced tariffs, or even no tariffs at all.
For example, one well-known free trade agreement is NAFTA, the North American Free Trade Agreement, which was established in 1994. But the United States is a party to 14 different free trade agreements that include 20 different countries.
Even if you do business with a free trade agreement nation, there may be tariffs to consider—essentially a tax on your exports or imports—based on the type of goods and services involved. Make certain you understand what tariffs may be in place before you settle on pricing.