An FTA, or Free Trade Agreement, is a treaty between two or more countries that reduces or eliminates trade barriers such as customs duties, quotas, or certain regulatory restrictions. In international trade, FTAs can lower landed costs and make cross-border sourcing more competitive when goods qualify under the agreement’s rules of origin. Importers usually need supporting documentation, origin statements, or certificates of origin to claim preferential duty treatment under an FTA.
Major FTAs Relevant to U.S. Importers
- USMCA: U.S., Mexico, and Canada
- KORUS: U.S. and South Korea
- U.S.-Australia FTA
- U.S.-Singapore FTA
- CAFTA-DR: U.S. and Central American countries and Dominican Republic
How to Use an FTA
- Verify the product qualifies under the FTA’s rules of origin
- Obtain or prepare a certificate of origin or self-certification
- Claim the FTA preference on the customs entry by entering the correct special program indicator
- Maintain documentation for five years
Related terms: Preferential Duties, Customs Clearance.
