Welcome to Trade Agreements Info – resources for trade agreement news, analysis, and other global trade management musings.
What Are Trade Agreements?
In case you’re just starting out or need a refresher, Trade Agreements are cooperative policies between two or more nations that reduce or eliminate duties and taxes on goods traded between the members - provided certain rules are met. There are a few different types of trade agreements, such as:
- Bilateral Trade Agreements: reduced or zero duties exclusively between two countries. Examples include US-Australia and US-Singapore.
- Multi-lateral Trade Agreements: reduced or zero duties between multiple countries. This includes DR-CAFTA, and ASEAN.
- Free Trade Agreements: Unless the word "free" is in the agreement, don't assume that you will not pay any duties! There are many agreements in effect, but not all of these eliminate duties (i.e. Belarus Trade Relations Agreement)
- Trade & Investment Framework Agreements: Not a 'free trade agreement' but opening the door to advancing trade between two or more countries.
Companies looking to optimize their low-cost country sourcing strategies realize the value within free trade agreements. In fact, many large exporters save $1,000,000 or more by sourcing from free trade agreement partners.
However, even through you see "free" doesn't mean there is no cost - setting up and maintaining a trade agreement system within a company can be costly and frustrating. Companies must not only ensure their items are properly classified and meet the FTA requirements, but their suppliers or customers must also maintain strict documentation and accurately comply with these rules. To manage this, importers and exporters need a Trade Agreement Solution.
