Across the world, trade agreements are making it easier to sell goods and services. They lower barriers to foreign investment, help domestic firms compete more easily in global markets and provide new standards in areas such as intellectual property and services. They are also lowering costs for consumers, increasing productivity and reducing corporate demands for government favors.
Since the 1947-48 creation of the GATT, through the eight rounds of multilateral trade negotiations and the ninth under the Doha Development Agenda, industrial countries have dramatically reduced their tariff rates on imported goods. These reductions have been accompanied by other changes in trade rules to address non-tariff barriers, such as regulations and rules on investment and services.
The WTO system of trade rules based on Most-Favoured-Nation status (MFN) and national treatment of imports is designed to make sure that nations treat each other fairly. This system disciplines how governments collect and apply tariffs by establishing rules on importing and exporting goods, including what a good is and what its value is. It also establishes rules to ensure that a country’s export subsidies and dumping (selling a product at less than cost to gain market share) are not damaging to its trading partners.
The US makes use of 14 bilateral and regional free trade agreements (FTAs) with 20 countries, and the US has been a leader in the expansion of these agreements. Despite some overstatement of their economic impact by proponents, numerous economic analyses have confirmed that these trade agreements do increase the flow of goods and services and reduce barriers to foreign investments.