International trade agreements are agreements between two or more nations formed to promote and encourage free trade among the nations involved. These agreements are essential in providing countries access to global markets, reducing tariffs and further trade barriers, and increasing economic growth.
The six major international trade agreements are the World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP), the European Union (EU), the Association of South East Asian Nations (ASEAN), and the Southern Common Market (MERCOSUR).
The World Trade Organization (WTO) is an international organization that works to encourage and manage global commerce. It is responsible for establishing the regulations for international trade, solving disagreements between countries, and helping countries that are still developing (Mattoo et al.,2020). Additionally, it acts as a negotiator between trading associates.
NAFTA is a trade agreement between the United States, Mexico, and Canada. The agreement terminated tariffs between the three countries and allowed them to access each other’s markets. NAFTA also secured the rights of intellectual property and labor.
TPP is an agreement between 12 countries. The United States, Canada, and Japan promote trade and investment among the members. The TPP was designed to create a more open and balanced trading system by eliminating tariffs and other troubling factors.
EU is an economic and political union of 28 European countries. The EU aims to build a consolidated market for goods and services (Mattoo et al., 2020). The EU has excluded tariffs between member countries and has created common standards for many goods and services.
The intention of ASEAN, an organization of 10 Southeast Asian nations, is to drive economic expansion and encourage unity in the area. Among its members, ASEAN has eliminated tariffs and established a single market for products and services (Mattoo et al., 2020). Its members include the Philippines, Singapore, Vietnam, and Thailand.
Finally, MERCOSUR is a regional trade agreement between Argentina, Brazil, Paraguay, and Uruguay. It aims to promote economic integration and development in the region, remove tariffs between its associates, and create a common market.
Reference
Mattoo, A., Rocha, N., & Ruta, M. (Eds.). (2020). Handbook of deep trade agreements. World Bank Publications.
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