Most Important Free Trade Agreements

The United States has another multilateral regional trade agreement: the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). This agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua eliminated tariffs on more than 80% of U.S. non-textile exports. In general, trade diversion means that a free trade agreement would divert trade from more efficient suppliers outside the region to less efficient exports within the territories. Whereas the creation of trade implies the creation of a free trade area that might not otherwise have existed. In any case, the creation of trade will increase a country`s national well-being. [15] 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. The EU is currently targeting more than 12 new free trade agreements (foreign trade or free trade agreements).

Among others, with Japan, several ASEAN countries, Mexico and also with the Mercosur countries. Commission President Juncker has announced his intention to conclude all the free trade negotiations under way during his term of office until 2019. In addition to multilateral trade liberalization within the framework of the World Trade Organization (WTO), preferential trade agreements are at the heart of the EU`s trade strategy. There are pros and cons of trade agreements. By removing tariffs, they reduce import prices and consumers benefit from them. However, some domestic industries are suffering. They cannot compete with countries with lower standards of living. This allows them to leave the store and make their employees suffer. Trade agreements often require a trade-off between businesses and consumers. As a result, many countries have shifted from the multilateral process to bilateral or regional trade agreements. Such an agreement is the North American Free Trade Agreement (NAFTA), which came into force in January 1994. Under NAFTA, the United States, Canada and Mexico agreed to eliminate all tariffs on merchandise trade and reduce restrictions on trade in services and foreign investment for more than a decade.

The United States also has bilateral agreements with Israel, Jordan, Singapore and Australia and negotiates bilateral or regional trade agreements with countries in Latin America, Asia and the Pacific. The European Union also has free trade agreements with other countries around the world. These agreements between three or more countries are the most difficult to negotiate. The larger the number of participants, the more difficult the negotiations.

Posted in Uncategorized