USA Free Trade Agreement
Free trade has formed part of the United States' economy and has helped exports to grow. Free trade has shaped U.S. economic policy and global economics. The United States has a number of free trade agreements with partner countries. Trade liberalization includes the dismantling of customs tariffs and other trade barriers to open markets for U.S. products and services abroad.
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Free Trade
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An important part of the recovery from the current recession will be the restoration of trade expansion. Nations sign free trade accords under which trade tariffs are reduced or eliminated. Free trade agreements allow for the free flow of trade between member nations. Free trade agreements have expanded a globalized economy, which since the 1990s has been a growing trend. Bilateral free trade agreements are accords between two nations, while regional trade blocs involve more than two nations.
Agreements
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As of July 2010, the United States has free trade agreements with 17 countries: Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Mexico, Morocco, Nicaragua, Oman, Peru and Singapore, according to the Office of the United States Trade Representative. U.S. trade agreements with Panama, Korea, and Colombia are pending congressional approval, according to Export.gov.
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Multilateral Agreements
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The U.S. has signed two active multilateral trade agreements as of July 2010: The North American Free-Trade Agreement and the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). The United States signed the Dominican Republic-Central America-United States Free Trade Agreement with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic. The CAFTA-DR consists of the first trade agreement between the United States and a group for smaller developing economies, according to the Office of the United States Trade Representative.
NAFTA
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The most extensive trade agreement the United States holds is the North American Free Trade Agreement. NAFTA is a multilateral trade accord consisting of the world’s largest free trade area, which links the United States, Canada and Mexico. Since the agreement implemented on Jan. 1, 1994 went into affect, trade between the three member nations has increased more than 200 percent, according to Export.gov.
Benefits
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The main benefit of trade agreements is the creation and expansion of new markets for U.S. products. As more U.S. exports make their way to foreign markets, American workers see the benefits. Trade agreements create jobs and raise the living standards for Americans. In agriculture alone, for example, U.S. exports supported 808,000 jobs, according to Office of the United States Trade Representative.
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References
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