Trade Policy: Bilateral Agreements
What is a Bilateral Trade Agreement?
A bilateral trade agreement is a formal arrangement between two countries to promote trade and economic cooperation. These agreements typically reduce tariffs, remove trade barriers, and establish clear rules for the exchange of goods and services. Bilateral agreements are negotiated and signed by the heads of state or government, and are designed to support international trade and market stability.
Formal Example: U.S.–South Korea Free Trade Agreement (KORUS FTA)
Agreement Name: United States–Korea Free Trade Agreement (KORUS FTA)
Signed: June 30, 2007 (prior to the Trump Administration)
Parties: United States of America and Republic of Korea
Purpose: To promote international trade, reduce tariffs, and strengthen economic ties between the two countries.
Key Provisions:
- Elimination of tariffs on nearly 95% of consumer and industrial products within five years.
- Enhanced protection for intellectual property rights.
- Commitments to fair labor and environmental standards.
- Improved market access for U.S. services and agricultural exports.
- Transparent dispute resolution mechanisms.
The KORUS FTA was negotiated and signed by the heads of state of both countries, reflecting a mutual commitment to supporting international trade and market stability through formal, bilateral cooperation.
Why Bilateral Trade Agreements Matter
- Promote economic growth and job creation.
- Reduce costs for consumers and businesses.
- Encourage innovation and competition.
- Strengthen diplomatic and economic ties between nations.