Trade Agreements
A trade agreement happens when two or more countries agree on terms which help them to trade with each other
A trade agreement usually involves a guarantee of investments with a wide range of taxes, tariffs
Different types of agreements take place concerning the situation and possible benefits for the countries who take part in it
Types of Agreements
1. Free Trade Agreement (FTA): it is a level of integration where countries agree to eliminate tariffs and other restrictive regulations on products originating from their territories
Accessing FTA benefits for your product a competitive advantage versus products from other Countries
2. Customs Union: It is a level of integration apart from removing tariffs for the products originating from their territories, agreeing on the duties applied on products
3. Open Regionalism: It seeks to increase integration among neighbouring countries, eliminating and reducing at the same time barriers to integrating with the rest of the world. it is considered a strategy to facilitate the international exchange of goods and services
4. Economic Integration: It is an arrangement among countries which usually starts with reducing or eliminating trade barriers. it has a logical order of depth on the degree of commitment to liberalization
5. Partial/ Preferential Scope Agreements (PS): It is a basic trade agreement which includes tariff reduction on a specific group of goods, sometimes unilaterally. it is usually seen as the first stage in a longer-term larger opening process
6. Most Favoured Nations: It is one of the principles of non-discrimination of the WTO. In normal conditions, if any country extends any benefit to a country it should extend that to all other countries too
