FTP (File Transfer Protocol) uses TCP (Transmission Control Protocol) as its transport protocol, which provides reliable data transfer through error detection and correction mechanisms. When a network error occurs during a file transfer, FTP attempts to recover the lost data by re-sending the packet until it is acknowledged as received by the receiving host. If the re-transmission limit is exceeded without success, FTP terminates the session and notifies the user of the failure. FTP also provides various error codes that indicate the nature of the error to help diagnose and resolve the issue. Overall, FTP provides robust network error handling mechanisms to ensure successful file transfers.