Trade Agreements Process

Economists have tried to assess the extent to which free trade agreements can be considered public goods. First, they deal with a key element of free trade agreements, the system of on-board tribunals, which act as arbiters in international trade disputes. These serve as a clarification of existing statutes and international economic policies, as confirmed by trade agreements. [18] Although the WTO is generally referred to as a “free trade institution,” it sometimes allows tariffs and, in limited circumstances, other forms of protection. In practical terms, it promotes a system of rules for open and fair competition. Trade agreements differ according to their content: trade agreements are generally very complex, as they are legal texts covering a wide range of activities, from agriculture to intellectual property. But they share a number of fundamental principles. EU trade policy is also used as an instrument to promote European principles and values, ranging from democracy and human rights to environmental and social rights. The EU manages trade relations with third countries in the form of trade agreements. They aim to create better business opportunities and overcome the obstacles associated with them. Before the vote on free trade agreements, there are a number of steps that must be taken by the executive as well as by the legislature.

The first step is to inform Congress 90 days before the start of negotiations. On May 18, 2017, the Trump administration sent a letter to Congress formally declaring its intention to begin renegotiating the North American Free Trade Agreement. Exactly 90 days later, on August 16, 2017, the United States, Canada and Mexico met to begin the formal renegotiation process. Shortly thereafter, the U.S. Bureau of Commerce informed Congress that changes in trade law were needed. This step must be taken 180 days in advance before trade agreements can be signed. On August 31, 2018, the Trump administration announced to Congress that it intends to sign the new free trade agreement with Mexico and Canada. But before he can sign an agreement, the president must first submit the text 60 days in advance to Congress, sent by the office of the U.S. trade representative at the end of September. Unlike a customs union, parties to a free trade agreement do not hold common external tariffs, i.e. different tariffs, or other policies concerning non-members.

This function allows non-parties to free themselves as part of a free trade agreement by entering the market with the lowest external tariffs. Such a risk requires the introduction of rules for determining which products originate may be preferred under a free trade agreement, which is not necessary for the establishment of a customs union. [20] In principle, there is a minimum processing time leading to a “substantial processing” of the products, so they can be considered original products.