What Is A Bilateral Free Trade Agreement
- Posted on October 14, 2021
- in Uncategorized
- by admin
5. Cipollina M, Salvatici L. Mutual trade agreements in gravitational models: a meta-analysis. Reverend Int Econ. (2010) 18:63-80. doi: 10.1111/j.1467-9396.2009.00877.x In most traditional representations of ITN networks, the volume of trade is represented by weighted and directed connections linking two industrial sectors or, at a rougher resolution, two countries [29, 30]. Here we assess the interconnection of two economies with a newly developed framework based on the interpretation of ITN as a flow network . In general, stream networks encode the probability that a random wanderer will move from one node to another. Thus, ITN as a flow network represents the probabilities that a single asset will follow certain paths through various industrial sectors throughout the supply chain. This probabilistic approach becomes necessary because individual supply chains cannot be traced from existing data. The EU has concluded trade agreements with these countries/regions, but both sides are currently negotiating an update. The announcement by the current US administration that it will review the country`s trade policy and negotiate “new and better agreements” through BTAC  has revived the debate on the impact of these agreements and the underlying interests and strategies. Especially in recent years, ATAs have become an increasingly important and frequently used political tool to establish and intensify close trade relations.
In these agreements, countries grant each other trade privileges in the form of concessions on trade barriers, including the reduction of tariffs and quotas and the facilitation of market access and competition rules. The theory suggests that the removal of trade barriers increases trade between participating economies, which stimulates economic growth in the contracting countries . Previous empirical studies – in particular using so-called gravity models – largely confirm a positive effect of BTAs on trade [3-6]. However, they also point out that this could be at the expense of shifting production from more efficient suppliers to other countries [3, 6, 7]. Thus, ATAs can improve some trade relations while weakening others that are not directly covered by the agreement. As a result, ATBs can change the structure of the international trade network formed by input-output links between national economic sectors. It has been demonstrated that the effectiveness of the BTF in improving trade between the parties depends on the specific characteristics of the countries concerned. In this context, it has been suggested that geographical proximity, common linguistic and/or cultural context or similar GDP are beneficial for increasing trade profits [8-11]. Compared to multilateral trade agreements, bilateral trade agreements are easier to negotiate because only two countries are parties to the agreement.
Bilateral trade agreements initiate and reap trade benefits faster than multilateral agreements. The European Commission reports annually on the implementation of its main trade agreements during the previous calendar year. Bilateral trade agreements also expand the market for a country`s products. The United States vigorously concluded free trade agreements with a number of countries in the early 2000s under the Bush administration, but in the global context, they must be seen as a springboard for full integration into a global free-market economy. .