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What Do Trade Agreement Mean

Britannica.com: Encyclopedia article on trade agreements In most modern economies, there are many possible coalitions of interested groups and the variety of possible unilateral obstacles. In addition, some trade barriers are created for other reasons not. B economic, such as national security or the desire to preserve or isolate local culture from foreign influences. It is therefore not surprising that successful trade agreements are very complicated. Some common features of trade agreements are (1) reciprocity, (2) a most-favoured-nation clause, and (3) domestic treatment of non-tariff barriers. There are often restrictions on host governments “depropriating” an investment. Classically, this means taking control of state property without compensation. But it can sometimes be interpreted quite broadly as including “indirect expropriation,” which includes actions that reduce the value of a foreign investment. Tobacco company Philip Morris tried to argue that Australia`s simple packaging laws expropriated its investments, even though it ultimately lost the case. The United States has another multilateral regional trade agreement: the Dominican Republic-Central America Free Trade Agreement (DR-CCAS).

This agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua eliminated tariffs on more than 80% of U.S. exports of non-textile industrial products. A government does not have to take specific measures to promote free trade. This non-surrendered position is called “laissez-faire trade” or trade liberalization. .