CHAPTER 7

INTERNATIONAL TRADE

AGREEMENTS
01 Discussion of International Trade and Agreement

02 Types of Trade Agreement, Trade Bloc, Free Trade

03 Philippine Membership to Regional Organization

 I O N A L T R A D E A N D
I S I N T E R N A T
WHAT
AGREEMENT

Trade agreements between two or more

countries involve reaching an
understanding on tax, tariff and restrictions
applicable the export and import of goods
and services. These treaties, which also
include the investment guarantees,
typically aim to establish a “free trade area”
where goods and services can be
exchanged across territorial boundaries
without imposing without imposing tariffs.
The countries (regions) forming a free
trade area impose a common tariff on
goods and services sold to non-member
countries.
 WHAT IS INTERNATIONAL TRADE AND
AGREEMENT

INTERNATIONAL TREATIES, also known as agreements,

conventions, pacts, accords, protocols, final acts, general acts, or
declarations, can vary in their terminology. These agreements,
whether bilateral or multilateral, are often referred to as "treaties"
when entered into by two or more states. Additionally, executive
agreements, made between the President and another country's
executive, do not require Senate approval. International trade
agreements are contractual arrangements between states
regarding their trade relationships and can be either bilateral or
multilateral.
TYPES OF TRADE AGREEMENTS

1. BILATERAL TRADE
AGREEMENTS
They are trade pacts between
nations. Bilateral agreements aim
at improving trade relations by
Incorporating favorable custom
duties, fiscal regulations,
transportation provisions and
levies on exports and imports.
TYPES OF TRADE AGREEMENTS

2. MULTILATERAL TRADE AGREEMENTS

These agreements involve more than

two nations having similar trade
interests agreements were born out of
the effect of trade restrictions imposed
between WW I and WW II. One of the
earliest multilateral agreemess was the
General Agreement on Tariffs and
Trade (GATT), formed in 1947,
Multilateral
OTHER TYPES OF MULTILATERAL AGREEMENTS

Multilateral Agreements to Deter Military Escalation

Multilateral agreements are often negotiated to deter

the escalation of international tensions by mapping
out the terms of between the various parties
involved. For example is the Antarctic Treaty
established in 1961 during the Cold War, serve to
prevent international tensions by outlining terms
among involved parties. In this case, the treaty
between nations, including the U.S. and the Soviet
Union, aimed to prohibit military activities and
nuclear testing in Antarctica while promoting
scientific cooperation, contributing to stability amid
Cold War rivalries.
Since 1959, 44 other countries have acceded
to the Treaty, Twenty-nine nations
(Argentina, Australia, Belgium, Brazil,
Bulgaria, Chile, China, Czechia, Ecuador,
Finland, France, Germany, India, Italy, Japan,
Korea (ROK), Netherlands, New Zealand,
Norway, Peru, Poland, Russian Federation,
South Africa, Spain, Sweden, Ukraine, United
Kingdom, United States, and Uruguay) have
achieved consultative status by conducting
substantial scientific research in Antarctica.
Russia carries forward the signatory
privileges and responsibilities established by
the former Soviet Union
OTHER TYPES OF MULTILATERAL AGREEMENTS

Multilateral Agreements for Economic Purposes

An ongoing example of a multilateral agreement that

promotes the economic interests of the member
parties is the European Union. The terms of the
European Union have allowed for the development of
a single currency (the Euro) within what is called the
Euro zone, to replace the multiple currencies of the
member countries. Another feature of the European
Union is a common EU passport for citizens of
member nations, allowing for free movement across
borders within the Union for work and visiting.
 What is the purpose of EU?

The aims of the European Union

within its borders are: promote
peace, its values and the well-
being of its citizens. offer
freedom, security and justice
without internal borders, while
also taking appropriate measures
at its external borders to regulate
asylum and immigration and
prevent and combat crime.
OTHER TYPES OF MULTILATERAL AGREEMENTS

Multilateral Agreements for Environmental Purposes

The Kyoto Protocol is a multilateral agreement aimed at

addressing climate change by regulating carbon dioxide
emissions. Despite global participation, challenges include
enforcing terms. The United States, despite signing in 1998,
didn't ratify it by June 2009, citing economic concerns and
disparities in controls for developing nations.

A trade agreement fosters joint commitment to expand trade,

often involving domestic reforms. Unilateral trade actions are
not agreements but a country's efforts to enhance its market
and reform its economy.
REGIONAL TRADE BLOCS

Regional blocs, formed by regional

governments to enhance intra-regional trade,
play a crucial role in the global economy,
constituting 55% of total global trade. The
number of Regional Trade Agreements (RTAs)
has surged, making up 40% of international
trade. Despite concerns, the proliferation of
RTAs after 2000, fueled by economic giants and
developing countries, reflects a desire for
broader markets. This growth presents both
challenges and advantages for the World Trade
Organization, emphasizing the pivotal role of
regional blocs in diminishing economic borders
within a region.
WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

Established in 1989 • Canberra, Australia. APEC begins as

an informal ministerial-level dialogue group with 12
founding members: Australia; Brunei Darussalam; Canada;
Indonesia; Japan; Korea; Malaysia; New Zealand; the
Philippines; Singapore; Thailand; and the United States.

Current APEC members: Australia, Brunei, Canada,
Chile, China, Hong Kong,Indonesia, Japan, South Korea,
Malaysia, Mexico, New Zealand Papua New Guinea, Peru,
Philippines, Russia, Singapore, Taiwan, Thailand, United
States, Vietnam

The Asia-Pacific Economic Cooperation forum is a loose

grouping of the countries bordering the Pacific Ocean who
have pledged to facilitate free trade.

It’s 21 members account for 45% of world trade. They have

to liberalize trade among themselves by 2010 for
developed and 2015 for developing countries.
 WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

What does APEC Do?

APEC ensures that goods, services,
investment and people move easily
across borders. Members facilitate
this trade through faster customs
procedures at borders; more
favorable business climates behind
the border; and aligning regulations
and standards across the region.
WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS
 WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

The members of the Cairns Group are Argentina,

Australia, Bolivia, Brazil, Canada, Chile, Colombia,
Costa Rica, Guatemala, Indonesia, Malaysia, the
Philippines, South Africa, Thailand, and Uruguay.

The Cairns Group has the objective to progress

agricultural trade liberalisation within the World
Trade Organisation (WTO) and continuously puts
agriculture on the multilateral trade agenda. The
Cairns Group is a prime example of international
coalition building to reform a key sector of world
MEMBERS AND IT'S PURPOSE trade.
WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

European Union: Austria, Belgium, Cyprus, Czech

Republic, Denmark,Finland, France, Germany. Greece,
Hungary, Ireland, Italy. Latvia Lithuania, Luxembourg,
Malta, Netherlands, Poland Estonia, Sweden, Slovakia,
Slovenia, Spain, United Kingdom.

The EU has risen as the world's leading trading bloc,

closely tied to former colonies through trade preferences.
Despite struggles to overcome its protectionist agricultural
history, recent reforms aim at balancing subsidies for
environmental support. In global trade talks, the G20, led
by emerging powers like Brazil, China, India, and South
Africa, challenges the EU and US. Their stance prioritizes
concessions on agriculture before considering final
agreements on services or reductions in tariffs for
manufactured goods.
 WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

The G20 members represent 85% of global

GDP, 75% of international trade and two-
thirds of the world's population. Because of
its size and strategic importance, the G20 has
a crucial role in setting the path for the future
of global economic growth.

The main objective of this summit is to unite

Achievements: key industrialised and emerging economies
Strong, Sustainable, Balanced, And Inclusive Growth.to address matters related to global economic
Accelerating Progress On Sustainable Development and financial stability. To achieve the same,
Goals (SDGs) the leaders of G20 member nations convene
Green Development Pact For A Sustainable Future. annually to deliberate and develop policies
Multilateral Institutions For The 21st Century.
concerning shared concerns
 WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

The G20 group of 19 countries

and the EU was established in
1999 as a platform for Finance
Ministers and Central Bank
Governors to discuss
international economic and
financial issues.
WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

NAFTA Members: Canada, Mexico, United States

The United States, Canada, and Mexico have established

the North American Free Trade Agreement (NAFTA),
covering trade, investment, and environmental/labor
issues. Despite concerns over weak safeguards, plans for a
broader Free Trade Area of the Americas (FTAA) are on
hold due to resistance, especially from Brazil. Meanwhile,
the US is pursuing individual free trade agreements, like
the Central American Free Trade Area (CAFTA). In South
America, the regional pact Mercosur, involving Brazil,
Argentina, Uruguay, and Paraguay, is expanding to include
Venezuela.
WORLD TRADE BLOCS: APEC, CAIRNS
GROUP, EUROPEAN UNION, G20, AND
NAFTA
OCS

NAFTA is created in Jan 01,

1994

The goal of NAFTA is to

eliminate all tariff and non-
tariff barriers of trade and
investment between the
United States, Canada and
Mexico.
FREE TRADE
 Free trade, according to some
economists, means letting businesses
trade across borders without too much
government involvement. They believe
this boosts efficiency and gives
consumers more choices at better prices.
Unilateral free trade is when a country
reduces import restrictions without
waiting for other countries to do the
same. This is seen as a way to make
domestic businesses improve by facing
foreign competition. Protectionism, on the
other hand, is criticized for shielding local
businesses but might make them lazy.
While international trade offers more
options and lower costs, whether it's
always good for everyone is still a
debated topic.
The importance of Trade Agreements
Trade agreements play a crucial role in facilitating the exchange of goods,
particularly benefiting smaller businesses with limited resources. These
agreements help mitigate challenges such as tariffs and non-tariff barriers,
allowing companies to explore foreign markets. Additionally, trade
agreements enable businesses to target multiple markets, protect against
confiscation or expropriation risks, and eliminate the threat of "import
bans." While international trade faces various unilateral barriers, trade
agreements work to reduce these obstacles, fostering increased trade and
mutual benefits. The agreements come in various forms, with bilateral
agreements being easier to negotiate, while multilateral agreements,
involving three or more countries, are more complex but offer substantial
competitive advantages. In a multilateral agreement, nations grant each
other Most Favored Nation status, treating one another equally.
 Most Favored Nation Clause

Trade agreements play a crucial role in facilitating the

exchange of goods, particularly benefiting smaller
businesses with limited resources. These agreements help
mitigate challenges such as tariffs and non-tariff barriers,
allowing companies to explore foreign markets.
Additionally, trade agreements enable businesses to target
multiple markets, protect against confiscation or
expropriation risks, and eliminate the threat of "import
bans." While international trade faces various unilateral
barriers, trade agreements work to reduce these obstacles,
fostering increased trade and mutual benefits. The
agreements come in various forms, with bilateral
agreements being easier to negotiate, while multilateral
agreements, involving three or more countries, are more
complex but offer substantial competitive advantages. In
a multilateral agreement, nations grant each other Most
Favored Nation status, treating one another equally.
PHILIPPINE MEMBERSHIP OF
MULTILATERAL ORGANIZATIONS

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 The Philippines is a member of the World Trade
Organization (WTO) (The Republic of the
Philippines is a founding member.)

The Philippines participates as a WTO beneficiary

nation of the GSP "Generalized System of
Preferences" program. Qualifying products
originating in GSP countries can be exported to
major developed countries and receive lower or zero
tariff rates, which aid in the promotion of exports for
the GSP country.
 Global trade - The World
Trade Organization (WTO)
deals with the global rules of
trade between nations. Its
main function is to ensure
that global trade flows
smoothly, predictably and
freely as possible.

The WTO has 164 members and 25
observer governments. Liberia became
the 163rd member on 14 July 2016, and
Afghanistan became the 164th member
on 29 July 2016. In addition to states, the
European Union, and each EU country in
its own right, is a member..
The WTO began life on 1 January
1995, but its trading system is
half a century older. Since 1948,
the General Agreement on Tariffs
and Trade (GATT) had provided
the rules for the system. (The
second WTO ministerial meeting,
held in Geneva in May 1998,
included a celebration of the
50th anniversary of the system.)
The WCO is a successor organization of
the CCC (Customs Co operation
Council) established in 1952, is an
independent enter governmental body
of worldwide membership whose
mission is to enhance the
effectiveness and efficiency of
customs administration. provides a
forum where delegates representing a
large variety of members can tackle
customs on equal footing It is the only
international organization dealing
exclusively with customs matters
The Philippine Membership to Regional
Organization

The ASEAN PTA is an arrangement

entered into by the ASEAN Member
Countries in 1977 to offer preferential
tariff treatment to products
originating from ASEAN states.
Under the arrangement ASEAN-
based importer will pay a lower tariff
rate on a product of in originated
from another ASEAN Member
Country than if the same product
was obtained from a non-ASEAN
ASEAN-PTA source.
The Philippine Membership to Regional
Organization
.Common Effective Preferential Tariff (CEPT)
Scheme for the ASEAN Free Trade Area
(AFTA).
.
The CEPT is a cooperative arrangement among
ASEAN Member States that will reduce intra-
regional tariffs and remove non-tariff Suates over a
10-year period commencing January 1993, the goal
of barnen is to reduce tariffs on all manufactured
goods to 0-5% by the year 2003.
The Philippine Membership to Regional
Organization

ASEAN Industrial Cooperation (AICO) Scheme

The AICO scheme superseded the ASEAN Industrial Joint ventures
(AIJV) and the Brand-to-Brand Complementation (BBC) Schemes. It
seeks to promote the sharing of industrial activities between and
among ASEAN-based companies. A minimum of two (2) companies
in two different ASEAN countries is required to form an "AICO
Arrangement."

An "AICO Arrangement" is a cooperative arrangement involving a

minimum of two (2) participating countries from two (2) different
ASEAN countries. It involves not only the Physical movement of
products between the participating companies and countries but
also resource sharing, industrial complementation or other industrial
cooperation activities.

ASEAN-PTA
BORCELLE