Free Trade Agreement Case Study

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Recommended: Globalization and free trade benefits

Background of Free Trade Agreement

The Globalization of FTA (too much for the background?)

According to the statistics from WTO, there are 255 regional trade agreements has been signed globally at the end of 2002 and 90% of these agreements are bilateral agreements. Bilateral agreements have gained increasingly attention and become one of the most important choices by more and more countries. In 2002 alone, Singapore has consecutively signed the bilateral free trade agreement with Japan, USA and Australia.

By the turn of the 20th century, to be up against to the challenge under new situation, Singapore, USA, Japan, China has corrected their free trade strategies timely, intensifies the efforts on the negotiation of free trade agreement and focus on multilateral negotiation instead of bilateral negotiation.

Free Trade Agreement is a legally binding contract between the two countries or multinational, the purpose is to promote economic integration and one of its goals is to eliminate trade barriers, allowing the free flow of products and services between countries. Generalized free trade areas are NAFTA, AJCEP, CEFTA, AFTA etc.

The ultimate goal of setting up free trade area is to avoid difficulties of multi-agreements of WTO. At …show more content…

Meanwhile, for both the import and exporter, free trade agreements can help simplify customs formalities. When there is an unfair agreement between protocol partners, FTA can help the trader to deal with the remedy. Also, only the goods originated by FTA members are qualified for the benefits. Firstly, FTA expedites the development of world trade by decreasing the cost of trade and circulation, promoting the liberalization and facilitation and giving impetus to new FTA. Secondly, FTA accelerates international investment as well as optimize the industrial structure and the effect of the allocation of

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