Trade & Economic Cooperation Agreement
The concept of a trade and economic cooperation agreement is simple. Historical examples of these agreements have many things in common, but the central purpose of the agreements is to boost trade among the states whose representatives sign the agreement. In addition, these agreements seek to support technical and financial cooperation among the parties involved. In effect, these agreements form trade blocs that give preference to each other and have the freedom to restrict outsiders.
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Basic Structure of the Agreements
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These agreements seek to pool resources and technical ability in the interest of all signatories. Some agreements of this type seek to take minor economic players--such as the South Pacific islands, for example--and create a unit that can penetrate larger markets. Others, such as the Chinese-EEC agreement, seek to maximize the trade potential between two powerful and massive markets. Regardless of the respective power of the signatories, these agreements lower tariffs, promote economic cooperation in capital intensive industries, such as computers and fuel, and make trade easier among participating states.
Canada and the Caribbean
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In 1979, Canada and most of the Caribbean nations signed a trade and economic cooperation agreement. This case was different from many other examples, because it pitted a strong economic player against extremely weak economic players in the Caribbean. In short, it was a means to facilitate the development of the Caribbean economies by making it easier for their goods---mostly raw materials such as sugar and bauxite---to be traded in the large and prosperous Canadian market. Tariffs were to be lowered dramatically over time, and Canadian technicians were to cooperate with firms in the Caribbean in technical and industrial projects.
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The South Pacific
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Like the Caribbean example, the 1982 South Pacific agreement sought to link the weaker South Pacific islands, such as Fiji and the Solomons, with New Zealand to penetrate the Australian market as a unified entity. The 1982 agreement was distinctive in that it sought to create a unified market in the South Pacific to facilitate trade---as a unit---with outsiders such as China. Like all these agreements, trade barriers were to be lowered, and technical cooperation was mandated to pool the resources of these otherwise economically negligible small islands.
Europe and China
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In 1985, the European Economic Community (EEC) signed a trade and economic cooperation agreement with China. Because China was a rising economic power, it was in the interest of the EEC to take advantage of this growing market. The basic provisions of the agreement helped to lower tariffs substantially on all goods traded between the two economies. The two economies were to join forces in areas of technology, industry, fuel and mining.
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