A trade agreement is a multilateral or bilateral commitment to limit protectionism in various areas. The agreements set international rules for treatment of foreign investment, intellectual property, and technical issues in trade (such as abuses of sanitary and phytosanitary measures to restrict imports). They also establish mechanisms for dispute settlement and other elements that help promote compliance.
The agreements are grouped into three broad categories: free trade agreements (FTAs), regional economic integration agreements, and preferential agreements that provide access to markets on a limited range of goods. The Office of the US Trade Representative oversees the negotiation and implementation of FTAs, which includes the management of advisory committees that bring together members representing industry, agriculture, small business, labor, consumer groups, service industries, and the non-federal government sector.
It’s important to note that while critics of trade agreements often overstate their economic benefits, the overall evidence shows that they are effective in moving the world toward more liberalized trade and reducing corporate demands for political influence. And while many economists can find a critique in the details of any given agreement, that shouldn’t obscure the larger picture: over the long term, the United States needs to be engaged with the rest of the world in its pursuit of freer trade.
Continuing to sit on the sidelines is simply not an option. The rest of the world is advancing with FTAs even as the United States lags behind, leaving American families and export-using producers to face discriminatory barriers in foreign markets while competitors there enjoy duty-free access.
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