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Write a Note on Trade Agreement

The exemption from the customs union was intended to take account of the creation of the European Economic Community (EC) in 1958. The European Commission, which originally consisted of six European countries, is now known as the European Union (EU) and comprises twenty-seven European countries. The EU has gone beyond simply removing barriers to trade between Member States and forming a customs union. It has moved towards even greater economic integration by becoming a common market – a regime that removes obstacles to the mobility of factors of production such as capital and labour between participating countries. As a common market, the EU also coordinates and harmonises the fiscal, industrial and agricultural policies of different countries. In addition, many EU members have formed a single currency area by replacing their national currency with the euro. The United States is a member of the World Trade Organization (WTO) and the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) establishes rules for trade among the 154 WTO Members. The United States and other WTO members are currently participating in the Doha Round of Global Trade Negotiations for Development, and a strong and open Doha Agreement on markets for goods and services would be an important contribution to overcoming the global economic crisis and restoring the role of trade in economic growth and development. As a general rule, the benefits and obligations of trade agreements apply only to their signatories. Trade agreements designated as preferential by the WTO are also called regional agreements (RTAs), although they have not necessarily been concluded by countries in a given region. There are currently 205 agreements in force (as of July 2007). More than 300 have been notified to the WTO.

[10] The number of free trade agreements has increased significantly over the past decade. Between 1948 and 1994, the General Agreement on Tariffs and Trade (GATT), the WTO`s predecessor, received 124 notifications. More than 300 trade agreements have been concluded since 1995. [11] One of the difficulties of the WTO system has been the problem of maintaining and expanding the liberal global trading system in recent years. Multilateral negotiations on trade liberalization are progressing very slowly and the demand for consensus among the many WTO members limits the scope of trade reform agreements. As Mike Moore, a new Director-General of the WTO, said, the organization is like a car with an accelerator and 140 handbrakes. While multilateral efforts have reduced tariffs on industrial products, they have had much less success in liberalizing trade in agriculture, textiles and clothing, as well as in other areas of international trade. Recent negotiations, such as the Doha Development Round, have encountered problems and their ultimate success is uncertain. In most modern economies, there are many possible coalitions of interested groups and the variety of possible unilateral obstacles. In addition, some trade barriers are created for other reasons not. B economic, such as national security or the desire to preserve or isolate local culture from foreign influences. Therefore, it is not surprising that successful trade agreements are very complicated.

Some common features of trade agreements are (1) reciprocity, (2) a most-favoured-nation clause, and (3) national treatment of non-tariff barriers. The European Union is today a remarkable example of free trade. Member countries form an essentially borderless entity for trade purposes, and the introduction of the euro by most of these countries continues to lead the way. It should be noted that this system is governed by a Brussels-based bureaucracy that has to deal with the many trade-related issues that arise between the representatives of the Member States. Trade agreements are usually unilateral, bilateral or multilateral. All agreements concluded outside the WTO framework (which grant additional benefits beyond the WTO`s most-favoured-nation level, but apply only between signatories and not to other WTO Members) are considered preferred by the WTO. Under WTO rules, these agreements are subject to certain requirements such as notification to the WTO and universal reciprocity (preferences should also apply to each of the signatories to the agreement), with unilateral preferences (some of the signatories enjoying preferential market access to the other signatory States without reducing their own customs duties) being allowed only in exceptional circumstances and as a temporary measure. [9] A free trade agreement is a pact between two or more countries aimed at eliminating import and export barriers between them. Under a free trade policy, goods and services can be bought and sold across international borders, with little or no tariffs, quotas, subsidies or government bans to impede their trade. A government does not have to take specific measures to promote free trade. This non-interventionist stance is called “laissez-faire trade” or trade liberalization. The world`s major countries founded GATT in response to the waves of protectionism that crippled world trade during the Great Depression of the 1930s and contributed to its expansion.

In successive rounds of negotiations, GATT has significantly reduced tariff barriers for industrial products in industrialized countries. Since the beginning of GATT in 1947, average tariffs in industrialized countries have risen from about 40% to about 5% today. These tariff reductions helped to promote the enormous expansion of world trade after the Second World War and the associated increase in real per capita income in both developed and developing countries. The annual gain from the elimination of tariff and non-tariff barriers resulting from the Uruguay Round Agreement (negotiated between 1986 and 1993 under the auspices of GATT) was estimated at about $96 billion, or 0.4 per cent of world GDP. The logic of formal trade agreements is that they describe what is agreed and what sanctions apply in case of derogation from the rules established in the agreement. [1] Trade agreements therefore reduce the likelihood of misunderstandings and create confidence on both sides that fraud will be punished. This increases the likelihood of long-term cooperation. [1] An international organization such as the IMF can provide additional incentives for cooperation by monitoring compliance with agreements and informing third countries of violations. [1] Monitoring by international organizations may be necessary to uncover non-tariff barriers, which are disguised attempts to create barriers to trade. [1] However, the WTO has expressed some concerns […].

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