Significance Of International Trade And Agreements


The main free trade zones are the European Union (EU), the North American Free Trade Agreement (NAFTA) and the Association of South Asian Nations (ASEAN). The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement regulating international trade. According to its preamble, its objective is to “substantially reduce tariffs and other trade barriers and eliminate preferences on a mutually beneficial basis.” The GATT was negotiated at the UN Conference on Trade and Employment and was the result of the failure of negotiations on the creation of the International Trade Organization (ITO). The GATT was signed in 1947 and lasted until 1993, when it was replaced by the World Trade Organization (WTO) in 1995. The original GATT text (GATT 1947) is still in force under the WTO, subject to amendments to the GATT in 1994. 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. Nothing in U.S. trade agreements prevents the definition of the U.S.

social safety net to help people disadvantaged by automation, changes in the types of goods and services that the global economy is demanding today, or even trade. Another aspect of the new trade theory is that what matters is not really what specializes in countries, it is specialization that is important, which allows companies to benefit from economies of scale that outweigh most other factors. Sometimes countries without excessive reason can specialize in certain sectors – it can only be a historic accident. But this specialization improves efficiency. With regard to high value-added products, multinationals often divide the production process into a global production system.

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