Economy & Politics

These are the most important free trade agreements

The RCEP agreement was sealed by video conferenceimago images / AAP

It is the largest trade agreement in the world to date. In November of this year, 15 Asian countries signed the “Regional Comprehensive Economic Partnership” – RCEP for short. The member states have been negotiating the agreement for eight years, accounting for almost a third of the world’s trade and around a quarter of the world’s population.

The aim is to dismantle tariffs and reduce trade barriers. China in particular is considered to have benefited greatly from the agreement. The People’s Republic thus binds the other states to itself and thus increases its own economic influence.

Free trade agreements have always been intended to regulate economic relations between countries, reduce trade barriers and lay down common rules for the movement of goods. There are numerous – bilateral, multilateral, large, small. These trade agreements are among the most important.

TPP / CPTPP

Australia, Brunei, Canada, China, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam have come together under the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP for short). The agreement is the follow-up agreement to the “Trans-Pacific Partnership” agreement (TPP for short), from which the USA withdrew in 2017.

The aim of the CPTPP is to abolish or reduce numerous tariffs. In addition, market access is to be made easier for companies from the countries concerned. The agreement was signed in 2018, but not yet ratified by all member countries.

NAFTA / USMCA

The “North American Free-Trade Agreement” (NAFTA for short) came into force in 1994. The free trade agreement between the United States, Canada and Mexico should lower tariffs and remove other trade barriers, facilitate investment and ensure adequate protection of intellectual property.

The agreement experienced its acid test at the end of 1994, when the Mexican financial market and the local economy plunged into a deep crisis. US President Donald Trump threatened to withdraw from the agreement at the beginning of his term in office. He lamented the US trade deficit: Mexico exported significantly more goods to the US than the other way around.

In 2018, the three states agreed on a new version of the agreement. Under the name “United States Mexico Canada Agreement” (USMCA for short) they passed new regulations for the auto industry, US farmers got better access to the markets in Canada and Mexico. In addition, regulations for the protection of intellectual property and for digital trade were added, and stricter labor law rules were adopted. The new agreement came into force in July 2020.

Infographic: RCEP: Asia-Pacific Forms World's Largest Trade Bloc | Statista You will find more infographics at Statista

The European Economic Area (EEA)

The European Economic Area (EEA for short) was established in 1994. The aim was to extend the EU provisions on the internal market to the countries of the European Free Trade Association (EFTA), which also includes Norway, Liechtenstein and Switzerland.

The agreement covers the free movement of goods, people, services and capital and related policy areas. The agreements of the European Economic Area go far beyond those of other trade agreements. In addition to the dismantling of trade barriers, all rights and obligations of the EU internal market will be transferred to the member states.

MERCOSUR

The South American countries Argentina, Brazil, Paraguay and Uruguay have come together under the name MERCOSUR (Mercado Común del Sur, in German: “Common Market of the South”). Chile, Ecuador, Colombia, Peru and Venezuela are associate members of the agreement. The countries not only work together economically, but also cooperate on political and social issues.

In addition to a common foreign and economic policy, MERCOSUR also aims to strengthen the free movement of goods and services. A joint economic council and a customs union intensify economic cooperation between the countries.

APTA

The “Asia Pacific Trade Agreement” is a regional trade agreement between Bangladesh, China, India, Laos, Korea and Sri Lanka that was signed in 1975. The aim of the agreement is to promote the economic development of the member states. Initially, negotiations were primarily focused on tariff concessions in the trade in goods, but then increasingly on possible liberalization of investments and services.

CETA

The “Comprehensive Economic and Trade Agreement” (CETA for short) is one of the latest trade agreements. In 2016, the EU and Canada agreed on a free trade agreement that aims to abolish around 98 percent of tariffs between the EU and Canada. CETA came into force provisionally in September 2017, but it has not yet been ratified by all EU member states.


Do you already know ours Newsletter “The Week”? In your mailbox every Friday – if you want. Here you can sign up


Tags

Related Articles

Back to top button
Close
Close