Both the creation of trade and the diversion of trade have a decisive impact on the establishment of a free trade agreement. The creation of trade will result in a shift in consumption from a cost producer to a low-cost producer, which will lead to an expansion of trade. On the other hand, trade diversion will mean that trade will move from a low-cost producer outside the zone to a more expensive producer in the free trade agreement.  Such offshoring will not benefit consumers under the free trade agreement, which will be deprived of the opportunity to purchase cheaper imported goods. However, economists note that trade diversion does not always harm the overall national well-being: it can even improve national well-being as a whole if the volume of misappropriated trade is low.  Note: Any customs union, every common market, every economic union, the Customs and Monetary Union and the Economic and Monetary Union are also a free trade area. Korea will liberalize more than 76% of its customs borders for imports from ASEAN, while ASEAN members will liberalize between 85 and 100% of their customs lines for imports from Korea. Korea has taken note of the increase in the volume of bilateral trade, which it said continues through close cooperation between the contracting parties to the agreement. Korea added that the parties were currently negotiating market access for sensitive products for additional benefits.
Thailand stated, on behalf of ASEAN, that the agreement builds on existing WTO obligations and provides for progressive trade liberalization through significant coverage of different sectors. Thailand pointed out that Korea is currently ASEAN`s fifth largest trading partner and tenth largest source of foreign direct investment. Full multilateral agreements (not listed below) see: List of multilateral free trade agreements. A free trade agreement is a pact between two or more nations to reduce barriers to trade between imports and exports. Under a free trade policy, goods and services can be bought and sold across international borders without government tariffs, quotas, subsidies or bans. The creation of free trade zones is seen as an exception to the most privileged principle of the World Trade Organization (WTO), since the preferences of the parties to the exclusive granting of a free trade area go beyond their accession 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 are currently a number of free trade agreements in the United States.
These include multi-nation agreements such as the North American Free Trade Agreement (NAFTA), which includes the United States, Canada and Mexico, and the Central American Free Trade Agreement (CAFTA), which includes most Central American nations.