Trade agreements Flashcards
What is it
Formal agreement between two or more countries that removes trade barriers between those in the agreement
A number of regional trade blocs have been formed around the world as a result of countries signing agreements stimulating trade
Advantages
Improving global peace and security, reducing conflict
Increasing global trade and economic co-operation
Encouraging social and economic development on LIC’s
Advantages
Improving global peace and security, reducing conflict
Increasing global trade and economic co-operation
Encouraging social and economic development on LIC’s
Overview
Trading products is expensive due to the controls and restrictions put on imports and exports. These restrictions are include:
- Tariffs (a tax for importing and exporting goods)
- Non-tariff barriers (NTBs), such as quotas (a limit/fixed number of goods) or requirements
- Outright bans on products or country import/exports
To lower the costs of trade, countries can enter trade agreements, which work to benefit all parties that are involved. In trade agreements, certain restrictions can be removed or lessened in return for another country doing the same. All trade agreements are overlooked by the World Trade Organisation (WTO) to ensure they are fair.
