A free trade zone is understood to be an area within a country or a combination of many countries where there is no longer a duty on imported goods, or other trade and transportation impediments.
Brief description
Internationally, the EU and NAFTA are good examples of free trade zones stretching across countries. There are no tariffs inside member countries, unlike in third countries, but there are restrictions on imports.
At the state level, free trade zones provide an incentive for existing companies or investors. By creating such zones, customs privileges are created to stimulate competition. Famous examples of this would be the various free trade zones in Asia (e.g. Xiamen Free Trade Zone - China, Tianjin Port Free Trade Zone - China, Free Trade Zone Malaysia).
