A System Of Agreements Between Nations
Regional trade agreements are trade agreements between two or more partners (nations). Almost all countries are part of at least one ATR. In an RTA, countries are „squatting“ and forming an international community that facilitates the exchange of goods and services between them. For example, the North American Free Trade Agreement (NAFTA), which was implemented between Canada, the United States and Mexico, facilitates trade between these countries by reducing tariffs and eliminating tariffs. The Association of Southeast Asian Nations (ASEAN), see below, provides for free trade, services, labour and capital in ten independent member countries to ensure a balance of power for China and Japan. The Central American Free Trade Agreement (CAFTA) (Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua and El Salvador) eliminated tariffs on more than 80% of U.S. exports and imposed U.S. trade restrictions on imports of sugar, textiles and clothing from Central America, thereby reducing the cost of these products to U.S. consumers. Another key element of the WTO`s success is its demand for transparency. WTO members are required to publish their trade rules and follow a system that allows external parties to verify and assess all administrative decisions and their impact on trade rules. If a WTO nation changes its trade policy, these changes must be notified to the WTO.
In 1823, the Reciprocity of Duties Act was passed, which strongly supported British carry-trade and allowed the reciprocal abolition of import duties under bilateral trade agreements with other nations. In 1846, maize laws, which had imposed restrictions on grain imports, were repealed and in 1850 most protectionist measures against British imports were abandoned. In addition, significant reciprocal reductions were introduced in the Cobden-Chevalier Treaty between Great Britain and France. It also contained a Most Preferred Nation Clause (MFN), a non-discriminatory policy that requires countries to treat all other countries equally when it comes to trade. This treaty has helped to launch a number of MFN treaties in the rest of Europe and to implement the growth of multilateral trade or free trade liberalization. The agreement came into force in May 2003.