The first WTO project was the Doha Round of Trade Agreements in 2001. It was a multilateral trade agreement among all WTO members. Developing countries would allow imports of financial services, particularly banks. This should modernize their markets. In return, developed countries would reduce agricultural subsidies. This would stimulate the growth of developing countries, which are good at food production. “Many U.S. companies benefit from the rules-based global trading system.” – Rob Mulligan The Free Trade Agreement between the Central Republic and the Dominican Republic was signed on August 5, 2004. CAFTA-DR has eliminated tariffs on more than 80% of U.S.
exports to six countries: Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua and El Salvador. By November 2019, it had increased trade by 104%, from $2.44 billion in January 2005 to $4.97 billion. If negotiations for a multilateral trade agreement fail, many nations will instead negotiate bilateral agreements. However, new agreements often result in competing agreements between other countries, eliminating the benefits of the free trade agreement (FTA) between the two countries of origin. The third advantage is that it normalizes trade rules for all trading partners. Businesses save court costs because they follow the same rules for each country. Hufbauer says there is “no doubt” that the United States “would have done better under the Trans-Pacific Partnership” than in the case of a bilateral agreement with Japan. “Trump is completely wrong that the TPP was a disaster, and I think he`s quite wrong to think that with this bilateral approach he`ll get a better deal – but he`s going to ask for a lot more. It may lead some countries to come up with his question – but we will see how far he goes. All global trade agreements are multilateral. The most successful is the general agreement on trade and customs. Twenty-three countries signed the GATT in 1947.
The aim was to reduce tariffs and other trade barriers. Some regional trade agreements are multilateral. The most important was the North American Free Trade Agreement (NAFTA), ratified on January 1, 1994. Nafta quadrupled trade between the United States, Canada and Mexico from 1993 to 2018. The U.S.-Mexico Agreement (USMCA) came into force on July 1, 2020. The USMCA was a new trade agreement between the three countries, negotiated under President Donald Trump. Similarly, Hufbauer argues that bilateral agreements also have a second major drawback: “The different [bilateral] agreements could have provisions [somewhat] different from each other, for example on digital trade, on state-owned enterprises or other. And so the field ends with a more confusing set of agreements that companies have to deal with with different countries. With respect to NAFTA, Hufbauer predicts that congressional committees will inform U.S.
trade officials in the coming months “of what they expect from Mexico and Canada to renegotiate NAFTA.” “And the renegotiation will begin. I guess once they start that process, they will start in Korea within 30 or 60 days. Multilateral trade agreements are trade agreements between three or more nations. The agreements reduce tariffs and facilitate the import and export of companies. Because they belong to many countries, they are difficult to negotiate. Hufbauer notes that U.S. trade negotiators “will be full” to renegotiate the terms of U.S. trade with Mexico and Canada. And while some predict that future bilateral agreements could be concluded with Japan, and in particular with the UK, “that won`t happen soon,” he says. In both cases, the negotiation process would also face challenges.