Trade agreements help reduce the barriers and restrictions that governments impose on each other’s international trade. They foster economic growth, encourage investment, resolve behind-the-border barriers that impede the flow of goods and services, and improve the rules that affect issues such as intellectual property and e-commerce.
Trade agreements are typically bilateral in scope, and they may include a variety of provisions such as lower or duty-free imports, reciprocal preferential access for goods and services (i.e., free trade areas), rules for government procurement, intellectual property protection, and foreign investment and labor standards. They can also include nontariff trade-related measures such as restrictions on foreign investment or selective excise taxes.
Examples of trade agreements that have been implemented by the United States include the U.S.-Peru Trade Promotion Agreement, which entered into force on February 1, 2009. Under this Agreement, 80 percent of qualifying U.S. consumer and industrial products became duty free immediately upon the Agreement’s entry into force, and the remaining tariffs are being phased out over 3-10 years. For additional information, including Text of the Agreement and Market Access Provisions click here.
The multilateral trade agreement, the World Trade Organization (WTO), sets the foundation for a global framework to promote more effective and equitable international trade. Its binding rules establish a system of fair and unbiased treatment for participants that applies to all aspects of international trade, including trade in goods, services, investments, intellectual property, and standards.
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