Key International Trade Agreements to Know for Intro to International Business

International trade agreements shape global commerce by reducing barriers and promoting cooperation. They impact economies, politics, and ethical standards, influencing everything from tariffs to labor rights, while fostering relationships among nations in a complex, interconnected world.

1. General Agreement on Tariffs and Trade (GATT)

   • Established in 1947 to promote international trade by reducing tariffs and other trade barriers.
   • Operated under a series of negotiation rounds, leading to significant tariff reductions among member countries.
   • Provided a framework for resolving trade disputes and ensuring fair trade practices.

2. World Trade Organization (WTO)

   • Formed in 1995 as a successor to GATT, with a broader mandate covering goods, services, and intellectual property.
   • Enforces trade agreements and provides a platform for trade negotiations and dispute resolution.
   • Aims to promote free trade and economic cooperation among its 164 member countries.

3. North American Free Trade Agreement (NAFTA) / United States-Mexico-Canada Agreement (USMCA)

   • NAFTA, implemented in 1994, eliminated most tariffs on trade between the U.S., Canada, and Mexico.
   • USMCA, which replaced NAFTA in 2020, introduced new provisions on labor, environmental standards, and digital trade.
   • Aims to enhance economic cooperation and trade flows among the three North American countries.

4. European Union (EU) Single Market

   • Established to allow free movement of goods, services, capital, and people among EU member states.
   • Harmonizes regulations and standards to facilitate trade and reduce barriers within the EU.
   • Promotes economic integration and cooperation among its 27 member countries.

5. Association of Southeast Asian Nations (ASEAN) Free Trade Area

   • Launched in 1992 to promote economic integration and trade among Southeast Asian nations.
   • Aims to reduce tariffs and non-tariff barriers, enhancing intra-regional trade.
   • Encourages cooperation in various sectors, including investment, services, and technology.

6. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

   • A trade agreement among 11 Pacific Rim countries, established in 2018 after the U.S. withdrew from the original TPP.
   • Aims to reduce tariffs, promote trade, and enhance economic cooperation in the Asia-Pacific region.
   • Includes provisions on labor rights, environmental standards, and digital trade.

7. African Continental Free Trade Agreement (AfCFTA)

   • Launched in 2021 to create a single continental market for goods and services across Africa.
   • Aims to boost intra-African trade by reducing tariffs and promoting economic integration.
   • Seeks to enhance competitiveness and foster sustainable development among African nations.

8. Mercosur (Southern Common Market)

   • Established in 1991 to promote free trade and economic integration among South American countries, primarily Argentina, Brazil, Paraguay, and Uruguay.
   • Aims to eliminate tariffs and facilitate the movement of goods, services, and people within the region.
   • Engages in negotiations for trade agreements with other countries and regions.

9. Bilateral Investment Treaties (BITs)

   • Agreements between two countries to promote and protect investments made by investors from each country.
   • Provide legal frameworks for resolving disputes and ensuring fair treatment of foreign investors.
   • Aim to encourage foreign direct investment by reducing risks and enhancing investor confidence.

10. Regional Comprehensive Economic Partnership (RCEP)

    • Signed in 2020, it is a trade agreement among 15 Asia-Pacific countries, including China, Japan, and Australia.
    • Aims to lower tariffs, enhance trade in goods and services, and promote investment among member countries.
    • Seeks to strengthen economic ties and create a more integrated regional market.