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While having Free Trade and Free Flow of Labour do have slight economic effects for the countries that poses the agreements, the general effects on economy and GDP are purposefully minor.

These agreements have two other important purposes: 1) To improve world opinion (ie "I'm a get-along-with-people free trading globally-thinking kind of country! Love me!), and 2) To improve relations between the two regions involved.

It has occasionally been commented that AI regions won't accept Formal Alliances when people think they should - well, how about trying to court them with some soft music, a bottle of wine, and a Free Trade agreement first? Maybe move up to second base and a Free Flow of Labour, and then if that fails get them drunk... but you get the idea.

On their own, "Free Trade Agreements" often have minimal independent GDP effects. The US signed a Free Trade Agreement with Chile - and hey, that didn't make any earth-shattering difference for either country. I bet 99% of US citizens don't even know it exists. Canada has had a 'Free Trade' agreement with the US for over a decade and I still have to go through an X-Ray strip search every time I cross the border (well, maybe not exactly that, but it seems like it some days).*

So these agreements have their purposes as mid-level diplomatic discussions, somewhere between 'Embassy' and 'Alliance'.

-- George.