free trade agreement

What Makes a “Good” Trade Agreement?

What Makes a “Good” Trade Agreement?

That said, agreements signed for non-trade reasons tend to exclude key sectors or items of interest, even in market access in goods chapters. They might provide 100 percent coverage of snow equipment—snow boots, skis, jackets, snowplows and snowmobiles—but carve out, or exclude, tropical fruits. If the agreement involves two equatorial members, a boast of “full coverage” for snow suits is unlikely to be met by enthusiastic manufacturers or traders, particularly if fruits that are actually exchanged are getting nothing new. Officials will often talk of the extent of coverage by bragging about the inclusion of tariff lines, ie, “this agreement includes 65% of tariffs from the first day of the agreement, rising to 90% coverage when fully implemented.” Given the high concentration of trade in a handful of tariff lines, firms might be extremely disappointed to discover that even 90% coverage may not provide any new tariff benefits for key products of interest. Better trade deals include more things.