An Applicable Free Trade Agreement: Understanding its Importance in Today`s Global Economy
In today`s global economy, free trade agreements have become an essential tool for countries to strengthen their economic ties, promote investment, and boost their international trade. By eliminating barriers to trade such as tariffs, quotas, and other restrictions, free trade agreements help create a level playing field for businesses to compete and expand their market reach.
One such agreement is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). CPTPP is a free trade agreement that was signed in March 2018 by 11 countries, including Japan, Canada, Australia, and New Zealand. The agreement aims to promote economic growth, enhance regional integration, and create new opportunities for businesses through the elimination of trade barriers.
CPTPP is applicable to a diverse range of sectors, including agriculture, manufacturing, and services. The agreement provides a framework for countries to cooperate and harmonize their trade rules, which can help reduce transaction costs and enhance overall efficiency. By enabling businesses to access larger markets, CPTPP can help spur innovation, increase productivity, and create jobs.
One of the key benefits of CPTPP is the elimination of tariffs and other trade barriers. For example, the agreement eliminates tariffs on 95% of goods traded between member countries. This means that businesses can export their products to other member countries without facing additional tariffs, which can significantly reduce their costs and increase their competitiveness.
Moreover, CPTPP contains provisions that protect intellectual property rights, promote e-commerce, and ensure fair competition. These provisions help create a level playing field for businesses to compete and ensure that trade is conducted in a transparent and fair way.
In addition to promoting economic growth, CPTPP also has significant geopolitical implications. The agreement includes countries from both sides of the Pacific, including the United States. Although the US withdrew from the agreement in 2017, some experts predict that it may eventually rejoin. This would create a more extensive and robust free trade area, enhancing economic and political ties between the Asia-Pacific region and North America.
In conclusion, free trade agreements such as CPTPP are essential tools that enable countries to enhance their economic ties, promote investment, and boost international trade. By eliminating trade barriers and harmonizing trade rules, free trade agreements provide a level playing field for businesses to compete and expand their market reach. CPTPP is an applicable free trade agreement that provides significant benefits for businesses and has significant geopolitical implications. As such, it is an agreement that every business should understand and consider when expanding their international trade.