TradeVistas is a joint initiative of the Hinrich Foundation and the Center for Strategic and International Studies (CSIS)
What is a free trade agreement?
Around the world, hundreds of free trade agreements are in force or under negotiation. WTO commitments do not prevent countries from negotiating these separate agreements, but they are considered exceptions and must meet certain criteria. Here’s what you need to know about agreements designed to create free-trade areas.
Global trade’s golden rule: Non-discrimination
In life we are taught, “Do unto others as you would have them do unto you.” In trade, we are taught the golden rule of non-discrimination. Non-discrimination isn’t just a founding principle, it’s an obligation. There are two basic rules of non-discrimination in WTO law: “national treatment” and “most-favored nation treatment”. As with any area of law, there’s a rich history of interpretation of these requirements as countries challenge each other in dispute settlement and case law is established. At their core, here’s what they require.
The case for sustainable trade
Trade has been a remarkable engine of economic growth and development, lifting hundreds of millions out of poverty since the birth of the modern trade system in Bretton Woods more than six decades ago. But how can a country trade sustainably, and deliver not only balanced economic benefits to its citizens, but also strengthen social capital and provide responsible environmental stewardship? At least some of the answers can be found by looking at the experiences of countries that have made policy choices to enable them to trade sustainably.
Seoul food from Idaho
In 2013, a group of teenagers in South Korea made international news when they were booted from a McDonald’s after buying $250 in French fries. The teens had hoped to host a “potato party” – a fad then sweeping South Korea and Japan. Since then, Koreans have kept up their love affair with potatoes.
Among the chief beneficiaries of the current Korean passion for potatoes are U.S. potato growers and processors, who’ve seen their exports explode in recent years. According to the U.S. Potato Board, U.S. potato exports hit a record high of $1.76 billion in 2014, shipping out 1,643,618 metric tons of potatoes. In 2015, potato exports slipped seven percent to $1.62 billion, still the third highest level of all time.
Skirts on lawnmowers and other “non-tariff” barriers to trade
Countries often use a variety of tactics to give their home-grown companies a leg up over foreign competitors. One obvious way to do this is to impose a tariff – or a tax – on foreign imports so that domestic products are cheaper than foreign goods. But countries also resort to less obvious or direct strategies – called “non-tariff barriers” or NTBs– in order to create advantages for domestic goods and services. Often, these barriers take the form of bureaucratic or legal barriers that have the effect of adding more hassle and costs for foreign companies seeking to import their goods.
TradeVistas seeks to engage readers in ways that relate trade to our own lives and communities.
Advances in technology and transportation have made it easier than ever for us to exchange products, services, and ideas with anyone anywhere the world. But as familiar as it is in our daily lives, few issues are as heated – or as fraught with conflicting information – as the current debate over trade. And it’s not a national conversation, it’s a global conversation.
Our primary goal with this site is not to advocate for or against any particular trade policy, but to provide a fact-based context in which to understand this broader debate. We also hope that the ideas we share and generate with your help will spark policy innovation in the ever evolving landscape of trade policy.
The Hinrich Foundation research team contributes to the editorial content of TradeVistas.