The Central America Free Trade Agreement (CAFTA) is a trade agreement between the United States and several Central American countries, including Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Established in 2006, CAFTA aims to reduce trade barriers, promote economic growth, and enhance cooperation among the member countries. By eliminating tariffs and encouraging investment, CAFTA seeks to create a more competitive environment for businesses in the region. The agreement also addresses issues such as labor rights and environmental protection, ensuring that trade benefits are balanced with social and ecological considerations.