Access to open market: This advantage of free trade zone is evident as the members are enable to access market of others. This enables trade openness which can be measured tangible in regards to growth in economy, productivity, living standard, more innovation, strengthened infrastructure and institution.
Creation of trade: This implies the role of free trade zone assisting in facilitating trade where it would have not occurred (Ramchandani and Coste-Maniere, 2015). Hence, this enables the supply from extremely efficient product producer. This increased the national welfare of France. Trade creation takes place from the consumption which is shifted from the high cost producers to the producers of low cost. This increased magnitude is depending on the supply and demand elasticity.
Trade openness and investment is considered as major economic growth catalyst. Trade itself defines the productivity gains. Economies of open nature are enabled to grow three times rapidly than the economies of closed manner.
Comparative advantage of more modern production specialization and higher amount of stages by which materials are changes before it reached to the end consumer. Through goods specialization in low cost for opportunity, growth in economic welfare for all nations can be obtained.
Employment is also enhanced along with the exports as proved through the industry employment data. Employment rises in industries of exporting nature and workers are displaced when import competing sectors are closed within the competitive environment (Gundogdu et al., 2016). As the cost lowers, the purchasing power of the consumers increased in numerous sectors that result in job creation.
Investment climate is improved through the enhanced opportunities of trade that makes a path for investment. Increment in the investment results in growth that in turn leads to the welfare of customer.
Raw materials exchange: This further allows and creates such conditions that the exchange of raw material in surplus can be performed. It allows opportunity for welfare gains of mutual nature.
Free trade zones are generally situated near airports and/or seaports that allow exemptions from the duties of import and export of the country on the products that are exported again (Unal, 2016). The organizations operating within such zone gain the value added to the traded products.
Fiscal incentives programs are often offered by the free trade zone that are above such offered to the concerned investors in the broader economy.