Trade Agreements Around The World

Despite the potential tensions between the two approaches, it appears that multilateral and bilateral/regional trade agreements will remain characteristics of the global economy. However, both the WTO and agreements such as NAFTA are controversial among groups such as alter-globalists, who argue that such agreements serve the interests of multinationals and not workers, while free trade was a proven method of improving economic performance and increasing overall income. To counter this opposition, pressure has been exerted for labour and environmental standards to be included in these trade agreements. Labour standards contain provisions relating to the minimum wage and working conditions, while environmental standards would prevent trade if there were fears of environmental damage. In 1995, GATT became the World Trade Organization (WTO), which now has more than 140 member states. The WTO controls four international trade agreements: the GATT, the General Agreement on Trade in Services (GATS) and the Trade-Related Intellectual Property Rights and Trade Investment Agreement (TRIPS and TRIMS). The WTO is now the forum for members to negotiate the removal of trade barriers; The most recent forum is the Doha Development Round, launched in 2001. Some countries, such as Britain in the 19th century and Chile and China in recent decades, have implemented unilateral tariff reductions – reductions that have been made independently and without contrary action by other countries. The advantage of unilateral free trade is that a country can immediately benefit from the benefits of free trade. Countries that remove trade barriers alone do not need to postpone reforms while trying to convince other nations to follow suit. The benefits of such trade liberalization are considerable: several studies have shown that incomes are rising faster in countries that are open to international trade than in countries that are more closed to trade. Dramatic examples of this phenomenon are the rapid growth of China after 1978 and India after 1991, with data indicating when major trade reforms took place.