President Bush first introduced the Colombian Free Trade Agreement to Congress in April 2008. Together, these agreements mean that about half of all goods entering the United States enter duty-free, according to the government. The average import duty on industrial products is 2%. On the other hand, some local industries benefit. They are finding new markets for their duty-free products. These industries are growing and employing more labour. These compromises are the subject of endless debate among economists. There are pros and cons of trade agreements. By removing tariffs, they reduce import prices and consumers benefit from them. However, some domestic industries are suffering.
They cannot compete with countries with lower standards of living. This allows them to leave the store and make their employees suffer. Trade agreements often require a trade-off between businesses and consumers. In addition, free trade is now an integral part of the financial and investment systems. U.S. investors now have access to most foreign financial markets and a wider range of securities, currencies and other financial products. These agreements between three or more countries are the most difficult to negotiate. The larger the number of participants, the more difficult the negotiations. They are, by nature, more complex than bilateral agreements, insofar as each country has its own needs and requirements. The General Agreement on Tariffs and Trade (GATT 1994) originally defined free trade agreements that were to include only trade in goods.
[5] An agreement with a similar purpose, namely the improvement of trade in services, is referred to as the „economic integration agreement“ in Article V of the General Agreement on Trade in Services (GATS). [6] However, in practice, the term is now commonly used [by whom?] to refer to agreements that concern not only goods, but also services and even investments. Environmental provisions have also become increasingly common in international investment agreements, such as free trade agreements. [7]104 Or there are guidelines that exempt certain products from duty-free status to protect domestic producers from foreign competition in their industries. At the international level, there are two important open access databases, which have been developed by international organizations for policy makers and businesses, but financial markets are unlikely to be subject to full free trade. There are many supranational regulatory bodies for global financial markets, including the Basel Committee on Banking Supervision, the International Organization of the Financial Markets Authority (IOSCO) and the Committee on Capital Movements and Invisible Transactions. The benefits of free trade were outlined in On the Principles of Political Economy and Taxation, published in 1817 by economist David Ricardo. The United States has another multilateral regional trade agreement: the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). This agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua eliminated tariffs on more than 80% of U.S. exports of non-textile goods.
Once negotiated, multilateral agreements are very powerful.