Sunday, 14 July 2013

Free-Trade Agreements Benefit Nations and the Global Economy

As the new global economy continues to grow and take shape, there are many international trade agreements being signed all around the world. One trade pact, the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) was originally formed in 2005, between Chile, New Zealand and Singapore; with Brunei joining a short while later. The agreement has proven to be so good for the original participating 4 members and since 2008 other countries all over the world have been in negotiations to join this free-trade agreement; most notably the United States.

Over the course of this time, free-trade negotiations have also included nations such as Australia, Canada, Malaysia, Mexico, Peru and Vietnam. Japan has also expressed an interest in becoming an active participant, but has made no formal application to take part in the negotiations. Some of the other world countries that may look at joining the deal include Taiwan, the Philippines, Laos, Colombia, Costa Rica, and Indonesia. In contrast, both of the world’s two most-populous and appealing emerging markets, China and India; have expressed little interest in becoming a contributing member.

Although from the onset these free-trade agreements seem to be a good thing, as far as encouraging more international trade, some nations involved in this particular pact have raised some concerns; over the years. Some of them claim that agreements being negotiated (mostly in secret), are more advantageous to big corporations and not so much for the benefit of individual countries. Perhaps this is one reason why so many FTAs are still under negotiation. One thing is for sure though, eventually an agreement will be made at some point and when it is, it could change the economic fortunes of every country involved.

There are many components that are "on the table" when it comes to creating an Free Trade Agreement that is good for everyone involved. Some involve the lowering of tariffs to a rate that is not only more affordable but still competitive at the same time. Other points of contention involve intellectual property rights, patents and copyrights among other legal matters. When it comes to these free-trade agreements, generally all sides try to negotiate what is best for their own country first, then look at the scope of the deal to see how fair it ends up being for all involved. Such is the nature of making any type of deal. A good deal is always the one that is best for all sides. At the moment, negotiations are slow because all sides have recognized that they have as much to lose as they have to gain, by joining the pact.

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