Trade Agreement Examples

As soon as the agreements go beyond the regional level, they need help. The World Trade Organization intervenes at this stage. This international body contributes to the negotiation and implementation of global trade agreements. Second, the multilateral removal of trade barriers can reduce political opposition to free trade in each of the countries concerned. This is because groups that otherwise oppose or are indifferent to trade policy reforms could join the free trade campaign if they see the trade agreement as export opportunities to other countries. Therefore, free trade agreements between countries or regions are a useful strategy for liberalizing world trade. Overall, the United States currently has 14 trade agreements with 20 different countries. Regional trade agreements are trade agreements between two or more partners (nations). Almost all countries are part of at least one ATR.

In an RTA, countries are “squatting” and forming an international community that facilitates the exchange of goods and services between them. Let`s take a look at some examples of regional trade agreements: bilateral agreements involve two countries. Both countries agree to relax trade restrictions to expand business opportunities between them. They reduce tariffs and give themselves privileged trade status. In general, the point of friction is important national industries that are protected or subsidized by the state. In most countries, they are active in the automotive, oil and food industries. The Obama administration negotiated with the European Union the world`s largest bilateral agreement, the Transatlantic Trade and Investment Partnership. Maliszewska M, Z. Olekseyuk and I. Osorio-Rodarte, March 2018, economic and distributive impacts of a comprehensive and progressive agreement on the Trans-Pacific Partnership: the case of Vietnam. Washington, D.C.: World Bank Group.

Customs unions are agreements between countries in which the parties agree to allow free trade in products within the customs union and they agree on a common external tariff (CET) for imports from the rest of the world. It is this CET that distinguishes a customs union from a regional trade agreement. It is important to note that, although trade within the Union is comprehensive, customs unions do not allow the free movement of capital and labour between Member States. The customs union of Russia, Belarus and Kazakhstan, founded in 2010, is an example. These countries have removed trade barriers between them, but they have also agreed on some common policies on relations with third countries. Critics of bilateral and regional approaches to trade liberalization have many additional arguments. They propose that these approaches undermine and supplant the MULTILATERAL approach of the WTO, which must be favoured for global use on a non-discriminatory basis, rather than supporting and complementing it.