This presentation exposes relevant information about trade agreements. What are trade agreements, what are tariff and non-tariff barriers, what main trade agreements exist today, what is the WTO.

1. Trade Agreements
October 23, 2018
Group 6 10 am
Giovanni Gagliardi, Catalina Manzano, Lucie Perrin ©

2. Overview
1. What are trade agreements?
2. Barriers
a. Tariff barriers
b. Non-tariff barriers
3. Main agreements
a. T-TIP
b. NAFTA
4. WTO

3. Trade Agreements (trade pact):
Wide ranging taxes, tariff and trade treaties
that often includes investment guarantees.
● What is agreed
● Punishment for deviation

4. Keys
USTR ● The United States Trade Representative
PTA vs. FTA
● Preferential TA and Free TA
● The US has FTA with more than 20 countries
TIFAs ● Trade and Investment Framework Agreements
Unilateral, Bilateral
and Multilateral TA
● Depending on the parts involved
● Most common: BTA

5. Barriers
Tariff barriers
vs.
Non-tariff barriers

6. A tariff is a tax. It adds to the cost of imported goods and is one
of several trade policies that a country can enact.
What is a tariff?
Who collects it?

7. Why tariff barriers
are used?

8. To protect employment
Competition from imported
goods can threaten
domestic industries
resulting on firing workers
to cut costs
To protect consumers
A government may levy a
tariff on products that it
feels could endanger its
population.
The government of a
developing economy will
levy tariffs on imported
goods in industries in which
it wants to foster growth.
To protect infant industries

9. Tariff barriers
Specific tariff
A fixed fee levied on one
unit of an imported good is
referred to as a specific
tariff. This tariff can vary
according to the type of
good imported.
Ad Valorem tariffs
The phrase ad valorem
means "according to value,"
and this type of tariff is
levied on a good based on a
percentage of that good's
value.

10. Non-tariff barriers
Licences
A license is granted to a
business by the government
and allows the business to
import a certain type of
good into the country.
Import quotas
An import quota is a
restriction placed on the
amount of a particular good
that can be imported.

11. Non-tariff barriers
Local Content Requirement
Instead of placing a quota
on the number of goods
that can be imported, the
government can require
that a certain percentage
of a good be made
domestically.
Voluntary export restraints
This type of trade barrier is
"voluntary" in that it is
created by the exporting
country rather than the
importing one.

12. Mapping Trade Agreements

13. Main Agreements
We will now focus on two main
current agreements and their
characteristics
1. T-TIP
2. NAFTA

14. 1. Transatlantic Trade and Investment Partnership (T-TIP)
A proposed comprehensive trade deal
between the EU and the US, with the aim of
promoting trade and economic growth
Characteristics:
● Focuses on eliminating tariff and non-tariff barriers on
goods
● Concerns over transparency, food safety, banking
regulations etc.
● Discrepancies between the US and the EU on trade
policy:https://www.ft.com/video/f8c42e5a-5c37-4cad-99
be-6edfa2b31d0e
Imports from EU Exports to EU
2014
-144,3
420,6
276,2
2015
29
427,8
272
2016
-146,8
416,4
269,5
2017
-151,3
434,6
283,2
-155,9

15. 2. North American Free Trade Agreement (NAFTA)
A trilateral trade bloc agreement signed in 1994 by the US,
Mexico, and Canada with the purpose of integrating two
highly developed economies with a developing one.
Effects:
● American, Mexican, Canadian perspectives
● Tripled US trade with NAFTA members, making Canada and Mexico the
two largest destination for US exports
● Led US companies to higher productivity and competitiveness
● Critics identify NAFTA as source of declining US manufacturing jobs and
wage stagnation
● Set to be replaced by USMCA

17. World Trade Organization
WTO
What is it?
What are the main characteristics?

18. World Trade Organization (WTO)
A global international organization which deals with
the rules of trade between nations: “A place where
governments try to sort out the trade problems they face with each
other.”
Characteristics:
● Established in 1995, includes 164 members (98 % of world trade)
● Consists of 16 different multilateral agreements and 2 different
plurilateral agreements
● The goal is to help producers of goods and services, exporters,
and importers conduct their business, as well as to open trade
● Decisions require entire membership’s consensus
25
35
22

19. “The world trading
system is under attack”
● Donald Trump’s
administration is not
following WTO rules by
putting too much taxes on
Chinese goods and car pieces
from Japan and the EU.
● They want to create a new
system to play by their rules.
- The Economist

20. Opening the debate…
Is the world trading system under attack?

21. Questions

22. References
● Amadeo, K. (2018, April 27). Unilateral Trade Agreements, Their Pros and Cons, with Examples. The Balance. Retrieved
2018-10-08.
● Bilateral Investment Treaties | United States Trade Representative. (n.d.). Retrieved October 8, 2018, from
https://ustr.gov/trade-agreements/bilateral-investment-treaties
● European Commission. Negotiations and Agreements. (2018, September 11). Retrieved October 8, 2018, from
http://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/
● "Fast Facts About the World's Largest Trade Agreement". The Balance. Retrieved 2018-10-08.
● Financial Times. (2018, August 31). EU has 'profound disagreements' with US on trade policy. Retrieved October 8, 2018, from
https://www.ft.com/video/f8c42e5a-5c37-4cad-99be-6edfa2b31d0e

23. References
● Free Trade Agreements | United States Trade Representative. (n.d.). Retrieved October 8, 2018, from
https://ustr.gov/trade-agreements/free-trade-agreements
● Grossman, Gene M. (March 2016). "The Purpose of Trade Agreements". NBER Working Paper No. 22070.
doi:10.3386/w22070.
● O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey 07458:
Pearson Prentice Hall. p. 453. ISBN 0-13-063085-3.
● Other Initiatives | United States Trade Representative. (n.d.). Retrieved October 8, 2018, from
https://ustr.gov/trade-agreements/other-initiatives
● "See Why Afghan Rugs Cost You More Today Than a Year Ago". The Balance. Retrieved 2018-10-08.

24. References
● "Top 12 U.S. Bilateral Trade Agreements". The Balance. Retrieved 2018-03-26.
● Trade & Investment Framework Agreements | United States Trade Representative. (n.d.). Retrieved October 8, 2018, from
https://ustr.gov/trade-agreements/trade-investment-framework-agreements
● Trade Agreements | United States Trade Representative. (n.d.). Retrieved October 8, 2018, from
https://ustr.gov/trade-agreements
● Transatlantic Trade and Investment Partnership. (2018, August 24). Retrieved October 8, 2018, from
https://en.wikipedia.org/wiki/Transatlantic_Trade_and_Investment_Partnership
● Transatlantic Trade and Investment Partnership (T-TIP). (n.d.). Retrieved October 8, 2018, from
https://www.trade.gov/fta/ttip.asp

25. References
● Williams @leeroy112, L. (2016, August 28). What is TTIP? And six reasons why the answer should scare you. Retrieved
October 8, 2018, from
https://www.independent.co.uk/voices/comment/what-is-ttip-and-six-reasons-why-the-answer-should-scare-you-9779688.html
● Wold, C. (2018, March 04). Transatlantic Trade and Investment Partnership (TTIP). Retrieved October 8, 2018, from
https://www.investopedia.com/terms/t/transatlantic-trade-and-investment-partnership-ttip.as
● "5 Pros and 4 Cons to the World's Largest Trade Agreements". The Balance. Retrieved 2018-10-08.