International Business Trade and Agreement PDF

INTERNATIONAL BUSINESS TRADE AND AGREEMENT Trade agreements A trade agreement is a negotiation between two or more countries regarding the terms of trade between them—tariffs, quotas, restrictions on imports and exports, and provisions, such as trade facilitation, intellectual property rights...

INTERNATIONAL BUSINESS TRADE AND AGREEMENT Trade agreements A trade agreement is a negotiation between two or more countries regarding the terms of trade between them—tariffs, quotas, restrictions on imports and exports, and provisions, such as trade facilitation, intellectual property rights, and investment protection. For cross-border ecommerce retailers, trade agreements can provide greater access to markets in partner countries, allowing them to expand their customer base and increase their sales. It is important to be aware of trade agreements and the advantages they offer to the countries involved, namely, retailers and consumers exporting and importing goods. Trade agreement are beneficial because they do the following:  Mitigate geopolitical and trading barriers  Encourage investments  Improve economies  Create jobs  Expand the variety of goods available  Enhance the standard of living  There may be requirements and/or restrictions to obtaining these benefits. However, once a country joins a trade agreement, trade among member countries can increase as they employ the benefits listed above.  Trade agreements play a big part in cross- border ecommerce and can drastically decrease the landed cost for imports, which spurs economic growth and international relationships. Trade agreements often offer preferential treatment (lowered duty or duty-free) based on what the product type and the country of origin (where they were produced). Preferential treatment, when utilized, can lower the import costs for a lot of cross-border trade.  Types of trade agreement  Trade agreements are at the heart of the World Trade Organization (WTO), which is the only global international organization dealing with the rules of trade between nations. Trade agreements play a major role in how global trade has improved in the last few decades. .The improvement is evident: world trade values have increased nearly 300 times since the 1950s, particularly due to the emergence of the WTO in 1995. While there are over 800 trade agreements in place around the world, most of them fall under one of three main types of trade agreements based on how many countries are  Unilateral: one-sided, non-reciprocal trade preferences granted by developed countries to developing countries to help improve and expand exports and facilitate economic development for developing nations.  Example: The South Pacific Regional Trade and Econo mic Co-operation Agreement (SPARTECA)  Bilateral: a symbiotic partnership promoting the exchange of goods and services between two countries, which encourages economic cooperation and benefits both countries.  Example: The European Union (EU)-Japan Economic Partnership Agreement (EPA)  Multilateral: a trade agreement between multiple countries that simplifies and lowers the cost of trade among three or more countries.  Example: Members of the World Trade Organization (WTO) must abide by the most-favored-nation (MFN) clause Regional Trade Agreements: Agreements among countries in a specific geographic area (e.g., European Union, ASEAN). Free Trade Agreements (FTAs): Reducing or eliminating tariffs and trade barriers between member countries. Customs Unions: Members adopt a common external tariff on imports from non-member countries.  Tariff Reductions: Lowering or eliminating duties on goods and services.  Market Access: Ensuring that businesses can enter and compete in foreign markets.  Investment Protection: Safeguarding foreign investments and providing legal frameworks for dispute resolution.  Regulatory Cooperation: Harmonizing standards and regulations to facilitate Benefits  Increased Trade: Stimulates economic growth by expanding markets for exporters.  Cost Savings: Reduces costs for consumers and businesses by lowering prices.  Diversification: Encourages businesses to explore new markets and reduce Challenges  Economic Disparities: May benefit larger economies more than smaller ones.  Regulatory Compliance: Businesses must navigate different legal systems and regulations.  Political Factors: Trade agreements can be affected by changes in government policies or international relations. Here are some notable recent trade agreements and their impacts on global trade: 1. USMCA (United States-Mexico- Canada Agreement)  Year: 2020  Impact: Replaced NAFTA, aimed at strengthening trade between the U.S., Canada, and Mexico. It introduced new RCEP (Regional Comprehensive Economic Partnership)  Year: 2020  Impact: Involving 15 Asia-Pacific nations, RCEP is the world's largest trade agreement by population. It aims to reduce tariffs and increase market access, promoting economic integration in Asia and potentially shifting trade flows toward Asian markets. EU-UK Trade and Cooperation Agreement  Year: 2021  Impact: Established the terms of trade between the EU and the UK post-Brexit. It aimed to minimize trade barriers but resulted in increased paperwork and customs checks, impacting businesses on both sides and leading to changes in UK-Australia Free Trade Agreement  Year: 2021  Impact: This agreement aims to enhance trade and investment between the UK and Australia, reducing tariffs on goods and improving access for services. It marks a significant step for the UK in establishing post-Brexit trade relationships. African Continental Free Trade Area (AfCFTA)  Year: 2021  Impact: Aims to create a single market for goods and services across 54 African countries. It is expected to boost intra- African trade by reducing tariffs and addressing non-tariff barriers, potentially enhancing economic development across  Popular trade agreement categories  Trade agreements can be further broken into a few different categories. Some of the main trade agreement categories practiced among countries today are regional trade agreements (RTAs), bilateral investment treaties (BITs), WTO agreements, suspension agreements, and intellectual property (IP) agreements. These agreement categories can be uni-, bi-, or multilateral agreement types.