Agreement International Trade

From time to time, you will hear about fast track trade laws, in which Congress would give the president the power to negotiate trade agreements. This law has not been passed and remains controversial. 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. Some countries, such as Britain in the 19th century and Chile and China in recent decades, have implemented unilateral tariff reductions – reductions that have been made independently and without contrary action by other countries. The advantage of unilateral free trade is that a country can immediately benefit from the benefits of free trade. Countries that remove trade barriers alone do not need to postpone reforms while trying to convince other nations to follow suit. The benefits of such trade liberalization are considerable: several studies have shown that incomes are rising faster in countries that are open to international trade than in countries that are more closed to trade.

Dramatic examples of this phenomenon are the rapid growth of China after 1978 and India after 1991, with data indicating when major trade reforms took place. There are a large number of trade agreements; some are quite complex (the European Union), while others are less intense (North American free trade agreement). [8] The resulting level of economic integration depends on the specific type of trade pacts and policies adopted by the trade bloc: 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. Therefore, the long-term outcome of bilateralism could be a deterioration of the global trading system into competing and discriminatory regional trading blocs, which could lead to additional complexity that complicates the flow of goods between countries. In addition, the reform of issues such as agricultural export subsidies cannot be effectively addressed at the bilateral or regional level. APEC is examining the prospects and options for a free trade area in the Asia-Pacific region (FTAAP), which would include all APEC member countries. Since 2006, the APEC Business Advisory Council, which advocates the theory that a free trade area has the best chance of converging Member States and ensuring stable economic growth within the framework of free trade, has committed to creating a high-level task force to study and develop a free trade area plan. The proposed free trade agreement was born out of a lack of progress in the World Trade Organization negotiations in Doha and a way to overcome the spaghetti bowl effect created by divergent and contradictory elements of the umpteenth free trade agreements.