Trade agreements are sets of rules agreed to by two or more countries to regulate their economic interactions. They typically address government barriers to trade imposed at the border and internal through taxes, regulations and other restrictions. Examples of these include tariffs, quotas and other forms of quantitative restriction, as well as rules on investor protection, intellectual property rights and global value chain participation.
A key component of trade agreements is their national treatment provisions, which require that all signatories treat imports from other members in a manner similar to how they treat domestically produced goods of the same type. This is a vital element of transparency that helps ensure that the benefits derived from trade agreements are fairly enjoyed by all parties, and that other countries do not abuse their privileges.
The United States is a party to 14 free trade agreements (FTAs), including two regional agreements: the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the United States-Mexico-Canada Agreement (USMCA). In addition, the U.S. has a number of bilateral PTAs, as well as a Trade and Investment Framework Agreement (TIFA).
While the benefits of a trade agreement can increase the ease with which your company can export to its trading partners, there are also many nontariff barriers that must be overcome. These can include different country standards, regulatory differences, or unique requirements to access a market (for example, requiring specific crash tests on products). Some of these obstacles are related to the country of origin requirements for trade agreements and must be addressed along with meeting the requirements of a particular agreement.