The purpose of trade agreements or blocs is to?

• A. To increase tariffs globally
• B. To create an area where trade is free for those involved
• C. To regulate currency exchange
• D. To restrict services

Answer: (B)

Trade agreements or blocs are about deepening economic integration by removing barriers to trade among member countries. The aim is to create a zone where goods and services can move more freely, with reduced or eliminated tariffs and fewer non-tariff obstacles for those inside the bloc. This freer trading environment encourages specialization, lower costs, more competition, and greater investment among members. While they may include rules of origin and sometimes a common external tariff, the core idea is freer trade for the participating countries. It’s not about raising tariffs worldwide, nor primarily about regulating currency exchange, and blocs generally liberalize services rather than restrict them.