A trade agreement is a negotiated pact that specifies the terms of commerce among two or more nations. They were created as a way to open foreign markets to exporters.
North American Free Trade Agreement
One of the most well known trade agreements is the North American Free Trade Agreement that was implemented in January 2004. The agreement removed barriers to trade between the United States, Mexico and Canada. Some politicians were vehemently opposed to the agreement. For example, presidential candidate Ross Perot urged Americans to listen for the "giant sucking sound" that would occur when jobs were lost due to the trade agreement.
Benefits
According to Export.gov, trade agreements help expand opportunities and open markets for American workers and businesses that want to get more involved in the global marketplace. Trade agreements can strengthen the business climate.
Effects
Trade agreements can promote fair competition and encourage better relations among governments. According to the Office of the United States Trade Representative, trade agreements help grow the U.S. economy by creating opportunities.
Considerations
The United States takes part in many trade agreements. Some of the countries with which the United States has active trade agreements include Chile, Australia, Israel, Jordan, Peru, Mexico, Canada and Singapore.
Significance
Topics addressed in trade agreements include government procurement, environmental standards, labor rights, intellectual property-rights protection and rules on foreign investment.
