There are pros and cons of trade agreements. By removing tariffs, they reduce import prices and consumers benefit from them. However, some domestic industries are suffering. They cannot compete with countries with lower standards of living. This allows them to leave the store and make their employees suffer. Trade agreements often require a trade-off between businesses and consumers. An unusual coalition of NAFTA opponents, which included labour and environmental activists, emerged as a result of issues related to wage gaps and job losses and environmental issues. Nafta supporters were also diverse. The successful vote of 234 to 200 in the House of Representatives was mainly due to the support of Republican members. Robert Dole, a former Republican senator and 1996 presidential candidate, was instrumental in supporting NAFTA.
Before the vote, all the former presidents showed up to show solidarity between the parties in favour of the trade agreement. In the final days leading up to the vote in the House of Representatives, President Clinton had to negotiate hard to make a majority decision. Foreign bureaucracy or non-tariff barriers, such as import certificate requirement.B s, have also prevented small businesses from exporting. Large companies often have either the resources to recruit consultants or the internal know-how available to overcome these sometimes hidden barriers. Not small businesses. Eliminating the confusing bureaucracy through trade agreements puts small businesses on a level playing field and is better positioned to develop internationally. On the other hand, small businesses are often able to respond more quickly to market changes than larger firms. This can give them an advantage if the pace of global change accelerates. Given that there are more “niche” market opportunities that can be considered insignificant for large multinationals, it is likely that small businesses will find many of them highly profitable and worth pursuing. In the early 1990s, GATT`s inability to remove non-tariff barriers had put the organization at risk. Its inability to successfully resolve the disagreement between the United States and the European Community over agricultural subsidies and to conclude the Uruguay Round as planned had raised doubts about the organization`s ability to meet future challenges.
In addition, the decline in world confidence in the GATT has contributed to the speed with which countries have formed trading blocs. Since the successful conclusion of the Uruguay Round agreements, confidence in his successor, the WTO, has increased considerably. Indeed, many believe that it will enforce international trade rules and resolve disputes between members better than their predecessors. Whether your supply chain for small businesses could be affected by a trade agreement could be resolved by whether your small business is an importer (or buys imported goods) or an exporter (or sold exported goods) or none. Free trade allows the total import and export of goods and services between two or more countries. Trade agreements are forged to reduce or eliminate import or export quotas. These help participating countries to act competitively. A common market is the first step towards a single market and may, initially, be limited to a free trade area.
A free trade area is created when two or more nations implement a policy of liberalizing preferential trade by eliminating or substantially removing trade barriers.