globalEDGE Blog - By Tag: free-trade

This globalEDGE Blog post is also shared as an opinion segment on the globalEDGE Business Beat on the Michigan Business Network (a radio show hosted by Tomas Hult).

The first two Regional Trade Agreements (RTAs) that existed in the world according to the World Trade Organization’s database on RTAs were the EC Treaty (what has now become known as the European Union), which started in 1958, and the European Free Trade Association (EFTA), which started in 1960. Today, some 60 years later, we have 299 RTAs in force (predicted to be about 308 RTAs by the end of 2018).

Complementing RTAs in the world are Bilateral Trade Agreements (BTAs) between any two of the world’s countries. These BTAs are more difficult to count exactly due to what can be considered an active agreement and what is considered a country. Given that we have 193 country members of the United Nations along with two so-called UN observers (Holy See/Vatican and Palestine) along with Taiwan and Kosovo (and 61 dependent and 6 disputed territories), the options are almost endless for potential bilateral agreements.

Including both RTAs and BTAs, the United States is engaging formally in 14 active trade agreements. The countries included in these 14 agreements are Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore. The first agreement that the U.S. entered into was with Israel in 1985, with Israel now being the 24th largest trading partner with the U.S. (amounting to about $50 billion annually).

The historical arc of international trade bends towards more of it. That’s why current efforts to skew trade further in favor of the U.S. by restricting access to the market will almost assuredly fail.

That also seems to be the lesson for the UK, as even many leavers want to remain part of the EU trade union, which among other benefits allows goods to be exchanged among members without paying duties.  The UK government must soon level with its citizens and let them know that they can’t select what they want from the EU as if they’re invited to a free buffet.

By insisting on renegotiating existing fee trade agreements to force terms more favorable to the U.S., and also slapping punitive tariffs on imports from certain trading partners, Trump hopes to erase decades of trade deficits and restore jobs lost when U.S. companies outsourced manufacturing to China and other countries. These efforts are not likely to work as promised and may end up making things much worse.

Why don’t Democratic members of Congress support free trade agreements?  The reason most often given is that historically Democrats have been the party of the working person.  And since the conventional wisdom holds that trade destroys jobs in the U.S., Democrats have to oppose it.

Related to this explanation is that labor unions are de facto extensions of the party and if they oppose trade then the party’s elected representatives must follow their lead on this issue.  Since unions donate money to candidates they support, to favor trade means saying goodbye to these contributions and the votes they represent.

In part two of this week's trade blocs series, we are taking a look at the Gulf Corporation Council.

Morocco is turning to the Gulf Corporation Council (GCC) as its trade relationship with the European Union takes an unexpected turn. The relations between the European Union (EU) and Morocco began to deteriorate when the European Court ruled that a farm trade accord did not apply to Morocco’s Western Sahara territory. Soon after, Morocco began to make ties with the GCC in order to diversify its markets away from the EU, its main trading partner.

As many of us know, the North American Free Trade Agreement (NAFTA) played a significant role in the US elections, with president-elect Donald Trump clearly stating that he will renegotiate the agreement with Canada and Mexico in order to stop the outflow of middle-class jobs. Changes in NAFTA would transform the auto industry in the US since it allows automakers, as well as other suppliers, to move production to Mexico without facing any tariffs and take advantage of the lower labor costs.

The Trans-Pacific Partnership (TPP) is a major trade deal meant to strengthen economic ties among its twelve member nations (United States, Japan, Vietnam, Malaysia, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Peru, and Chile). If the TPP were to pass in every country involved in the trade deal, it would give the countries with smaller economies the opportunity to grow at a rapid pace. This trade deal would eliminate tariffs between the member nations. Countries with cheap manufacturing labor like Malaysia and Vietnam would benefit immensely from being able to export to the massive consumer markets in the United States and Canada without any tariffs being imposed. Many of the smaller countries are looking to see if the United States will ratify the TPP.  Singapore’s Prime Minister has said that America must ratify the Trans-Pacific Partnership to show it is serious about doing business in the Asian-Pacific market. Currently, it seems unlikely that the TPP will be ratified by the US Congress during Barack Obama’s presidency and both of the major US presidential candidates oppose the TPP in its current form.

For the past five years the European Union and Canada have been negotiating the terms of a comprehensive free trade agreement. The Comprehensive Economic and Trade Agreement, or CETA, would effectively eliminate 98% of tariffs between Canada and the EU, leading some experts to predict an increase in trade of over 20%. CETA was in its final form, with a signing ceremony scheduled for this Thursday, October 26th, but the deal was blocked at the last minute by Wallonia, the French speaking region of Belgium.

Chaos flooded the streets of Berlin. 80,000 protesters gathered, while up to 320,000 others held organized protests in seven other major German cities, to express their strong opposition to the proposed Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US. In 2013, the EU and the US began negotiating a trade deal, hoping to create the world’s largest free trade market of 850 million consumers. The proposed deal promises to lower tariffs, and hopes to promote economic growth overseas. Protesters fear the deal will lead to an increase in outsourcing and unemployment, as it favors industrialized agricultural processes over non-GMO privatized food production. This prioritization would likely cost thousands of jobs and could potentially compromise food safety and employment standards.

The USA, more than most other countries, has been reluctant to engage in trade agreements. As a backdrop, the US-Israel Trade Agreement is the oldest agreement involving the US and it went into effect on September 1, 1985. Since then, the US has signed 13 more trade agreements, covering 20 countries in total with the Israeli agreement (with 18 more agreements being deliberated).

But, during the same 30-year period the world has seen 256 new trade agreements involving a large portion of the world, as registered with the World Trade Organization (see my article in The Conversation). Nineteen trade agreements were in force worldwide in 1985. Now there are 275, with 132 agreements being implemented in the last decade. The bottom line is that the US is very reluctant to engage in almost any form of trade agreement compared with the rest of the world.

This blog was written using a wealth of materials promoted by the United Nations, UNCTAD, and various UN Forums, such as the World Investment Forum, but with my take on the implications and where to go from here. This inclusion of official, publicly available UN materials sets the tone for the debate about UN’s Sustainable Development Goals (SDGs), the 2030 Agenda, funding and bold leadership required, and the worldwide collaboration needed by the UN’s 193 member states. My take is that collaboration – whether it be structured as a series of multilateral agreements and/or regional agreements – is the way to go over any form of isolationism.

On July 11, Canadian Prime Minister Justin Trudeau, Ukrainian President Petro Poroshenko, and Ukrainian Prime Minister Volodymyr Groysman together signed the Canada-Ukraine Free Trade Agreement (CUFTA). The agreement, signed in Kiev, is meant to further improve market access between the two countries, settle trade conditions, create jobs, and cement their status as allies. The Canadian government has been a fervent supporter of Ukraine ever since the nation's first clashes with Russia, which left Ukraine in war-torn, economically faltering conditions. Talks for CUFTA between the two countries had been going for months before final negotiations wrapped up last year. Now, the confirmation of CUFTA signifies Canada's continued support of Ukraine in the face of its struggles.

China devalued its yuan in 2015 by calculating the reference rate on a daily basis and letting market forces affect the value. For some, it seemed like a good idea to get China more into the dynamic financial market. For others, it’s not playing out that way.

With the Iran nuclear deal and US sanctions lifted, Iran’s market – read oil production and related industries – should open up to companies. Not really. There is just too much bad feeling and economic turmoil for some to engage.

While the cases of China and Iran involved decisions being made (by China and by the US vis-à-vis Iran), TPP has been in negotiation since March 15, 2010 without an agreement. TPP, often talked about, seldom spelled out, refers to the “Trans-Pacific Partnership” and involves 12 primary countries as potential trading partners. Nineteen official negotiation rounds between 2010 and 2013 and numerous other meetings since led simply to indecisiveness.

International trade has become a negative phenomenon in the US election cycle in 2016 as well as influenced the BREXIT. Last year, on October 5, 2015, US President Obama used the “fast track powers” granted to him by Congress to seal the Trans-Pacific Partnership agreement. TPP involves the US and 11 Pacific nations that encompass 40% of global trade (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US, and Vietnam).

But is US trade a lost cause and is the signing of TPP too late to be helpful for US trade? The US share of the Asia-Pacific region’s imports declined about 43% from 2000 to 2010. Gaining that back would mean an additional $600 billion annually by 2020, supporting some 3 million US jobs. Now, other countries are exporting much more to these countries, and at an increasing rate. Why is that?

Christine Lagarde, the head of the International Monetary Fund (IMF), gave a speech concerning the global economy last Tuesday in Frankfurt, Germany. The speech covered several facets of international business and economics, including free trade, political risks to worldwide economies, income inequality, and recent policy actions. Above all, Lagarde emphasized the overall state of the global economy, claiming that the current pace of economic recovery and growth is much too slow. Lagarde warned that unless more is done to kickstart economic growth, the global economy will fall behind. Her speech precedes, and perhaps sets the tone for, the IMF and World Bank spring meetings, set to take place in Washington D.C.

In the third part of this week’s blog series on the ASEAN Economic Community (AEC), we will look at the many economic and investment opportunities created with the formation of the new economic bloc, along with some possible economic implications in the region. With a combined population of 625 million and a relatively low GDP per capita, many see the AEC as a region ripe for growth and opportunity. The economic community has the potential to significantly impact all ten participating countries, as a reduction in tariffs and freer trade could open new avenues for many businesses in the bloc, as well as foreign companies looking to expand.

As far as regional trade agreements are concerned, the upcoming Trans-Pacific Partnership (TPP) is constantly being compared to the North American Free Trade Agreement (NAFTA). United States citizens in particular are concerned as to whether free trade is actually beneficial to the U.S. economy and its workers. When NAFTA entered into force in 1994, tariffs were cut and laws were changed in order to allow free trade between the U.S., Canada, and Mexico. While many proponents of the agreement believe that NAFTA has stimulated the economies of these countries, others believe that the framework for the agreement can serve as a warning of what could potentially go wrong with the TPP. 

The Trans-Pacific Partnership (TPP) is a trade agreement between twelve Pacific Rim countries with the goal of lowering or eliminating trade barriers, including tariffs, quotas, and other restrictions, between the nations involved. Major nations such as Canada, Japan, the United States, and Mexico all have stakes in the partnership. The proposal has undergone negotiations for several years, with plans to finalize the agreement going back to 2012. The passage of the TPP has been of high priority for the Obama Administration. However, there have been several controversies with the agreement that have prevented it from coming to fruition. In its latest round of negotiations, which ended on July 31, the partnership was delayed once again, citing disagreements over certain trade industries, potential human rights violations, and corporate interests. This time, it looks to be a bitter blow for the TPP.

In hopes of inspiring nearly 1 trillion dollars worth of economic activity, African leaders will officially announce a new pact known as The Tripartite Free Trade Area (TFTA) at an upcoming summit of the African Union in South Africa. The new free trade zone will cover 26 countries in the area from Cape Town to Cairo, becoming the largest free trade zone on the continent. Three current trade blocs within Africa are to merge as one, the Southern African Development Community (SADC), the East African Community (EAC), and the Common Market for Eastern and Southern Africa (COMESA).

It has been big news in the world economy that The Association of Southeast Asian Nations (ASEAN) is trying to implement a single economic community called the ASEAN Economic Community (AEC). What does this mean for ASEAN and the entire world economy? The AEC is expected to lead to a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.

Brazil and Mexico have renewed vehicle quotas for four years, postponing the creation of a free trade agreement to at least 2019. The two largest Latin American economies originally had free trade of vehicles for a brief period in 2011 and 2012, but transitioned to a quota system after Brazil complained of economic issues that were hurting the nation’s competitiveness abroad, especially in the auto industry. The new deal penned earlier this month permits $1.56 billion of duty-free vehicle imports for the first year of the agreement. This amount will increase by 3% every year until 2019 when the nations will return to free trade, barring any extension or renewal of the quota system.

After eight years of negotiation, China and Australia finally drew a free trade deal on last Monday. This agreement signals a transformational change in the economic relations between China and Australia because trade tariffs in dairy, beef, and horticulture products will be completely eliminated within the next couple years. Without a doubt, it will greatly facilitate the trade between these two countries. On the other hand, Canada, one of Australia's main competitors, is now worried about its exports to China.

A free trade agreement (FTA) is a treaty between two or more countries that reduces trade barriers and encourages transparent trading and investing among member countries. Consistently, free trade agreements have benefited United States exporters by making foreign markets more accessible and by creating a more stable and transparent trade environment. In 2012, nearly half of US goods exports went to FTA partner countries and the US manufacturing sector alone realized a $59.7 billion trade surplus. Currently, the United States has 14 free trade agreements in place with 20 countries and is in the process of negotiating two additional FTAs.

Negotiations on the proposed Trans Pacific Partnership (TPP) heated up over the past week during President Obama’s visit to Asia, although no major breakthroughs in the talks were announced. The negotiations slowed down during the President’s visit to Japan, as talks between the United States and Japan focused on the auto industry; the two countries have long had a rivalry in the auto sector.  Japanese car companies entered and ended the Big Three’s dominance of the US market during the 1970s. This tension has continued today, influencing the trade discussions and preventing the countries from reaching a deal during last week’s negotiations.

The North American Free Trade Agreement (NAFTA) came into effect January 1, 1994, creating the foundation for economic growth and strengthening trade relations between Mexico, Canada, and the United States. Now in 2014, it has been over 20 years since NAFTA has been in place. To better understand the economic impacts of NAFTA, we have prepared a table showing trade statistics before and after NAFTA.

The Trans-Pacific Partnership, or TPP, is a trade agreement between twelve countries, including China, Japan, the United States, Canada, Mexico, Chile, and Peru. This agreement, if ratified, would eliminate almost all trade barriers between these twelve countries, uniting them in the largest free-trade zone in world history. The problem is, it doesn't seem to be getting approved anytime soon; talks that occurred just last week in Singapore ended with the countries reaching no finalized agreement that would put the TPP into effect. As the partnership has been undergoing negotiation talks for years, it is wondered how much longer it will take for the countries to cooperate on certain final issues and establish the partnership.

In a meeting last week, the leaders of the United States, Mexico, and Canada got together and discussed various issues surrounding their own countries, including forming new trade agreements to open up more trade across the globe. These three countries entered into their own agreement 20 years ago when they signed the North American Free Trade Agreement (NAFTA), which was a significant step for regional trade in the Western Hemisphere. Now, these three countries hope that they can use NAFTA as a springboard to form new agreements with other countries in an attempt to find new markets and diversify their own economies.

Throughout the past year China has announced its plans to open industries to foreign companies. Since the Shanghai free trade zone was introduced in September 2013 China has made many attempts at opening up parts of the economy in hopes of stimulating economic progress in the country. Within the Shanghai zone the government is testing free trade in Chinese currency as well as allowing interest rates to be set by market forces. This provides a great opportunity for foreign companies who wish to harness the mass market China provides.

Ukraine’s economic future is contingent on a key decision that will be made by government leaders in the next couple of weeks.  In short, the country’s leaders must decide whether or not to accept a free-trade and political-association agreement with the European Union.  If Ukraine passes on this agreement, it is likely that the country will become a part of the Russian-led Customs Union, which also includes Belarus and Kazakhstan.  This decision will undoubtedly shape Ukraine’s economic environment going forward, especially related to trade.

In terms of art, China is certainly in a buying mode. Meg Maggio, an American gallery owner with 20 years of experience in China, found that western firms are pouring into the Chinese art market nowadays. This year, China has officially surpassed the United States in becoming the world’s profitable art and auction market. The Chinese art market posted auction revenues of $8.9 billion in 2013. However, freedoms of foreign firms in the industry are strictly limited by Chinese authorities and competition has increased between local and foreign firms. This post will address the challenges that foreign auction houses are facing in the Chinese art and auction market.

Venezuela experienced an extreme 12-month inflation rate of 54% last month and shortages of basic goods. Venezuelan President Nicolas Madura has responded to extreme inflation by forcing managers of local businesses to lower their prices with arrests and armed forces. The socialist leader stated that the seizure of these stores was just the tip of the iceberg and that he will take over more businesses. These events could have a major effect on Venezuela’s economy, including an outflow of foreign investment and firms.

Recently, the European Commission traveled throughout the Baltic Countries, which include Lithuania, Latvia, and Estonia, to promote the European Union’s plan for Rail Baltica. This project plans to connect the three capitals of the Baltic countries with a high speed train and cut the travel time to about four hours. Despite the promotion by the EU, there are still many headwinds that this project faces.

On Sunday, China opened a new, 28 square kilometer free trade zone in northern Shanghai. The zone will feature loosened restrictions compared to greater China, such as more freedom for banks and the opening of several industries. Foreign investors and companies hope the new zone will allow for easier access to the Chinese market, but the Chinese government has released few specifics on the regulations and rules of the zone. This has brought along skepticism on whether the zone will have any meaningful impact.

On July 1, 2013 Croatia was all festivities, celebrating their induction as the 28th member of the European Union (EU). Joining the EU will provide Croatia with more legal stability, a larger market for their goods, and a projected $18 billion earmark between 2014 and 2020. While this ensures great things for the Croatian economy, we cannot forget about the implications, good or bad, on the relationship between Croatia and the other Balkan Countries.

Japan is the world’s third largest economy and the United States is the largest economy in the world ranked by GDP. But, these two huge economies do not have a free trade agreement, which strikes the question – why not? Obviously, there are a lot of reasons why these two great nations have not struck a deal yet, but one could be on the horizon.

A few months ago, Zheng wrote a blog post about a possible Trans-Atlantic trade agreement. Recently, talks have been heating up between the United States and the European Union with negotiations on a trade deal likely to begin by the end of June. The free trade agreement, if passed, would remove tariffs and reduce other barriers to trade, spurring economic growth, exports and job creation for both parties. Given the stagnant state of the global economy, there is much excitement over a potential deal and optimism is high that an accord will be reached.

The World Trade Organization is investigating an Indian governmental program that requires solar energy producers to use Indian manufactured solar cells instead of imported products. Several U.S. environmental groups are pressing the WTO to not pursue action against India, saying that ending the program would threaten the ability of India to cut greenhouse gas emissions. The irony is that India’s green energy industry would be harmed if no action were to be taken, a blow to the environmentalists goal of increasing alternative energy use throughout the globe.

While "made in China" products become wide-spread in the U.S and China-U.S trade continues to grow, the trade between the European Union (EU) and the U.S is actually the driving force behind world trade figures. Indeed, the EU-U.S trade is the largest trade in the world and comprises one-third of all trade, determining the shape of the global economy. Now, the debt crisis in Europe and the desire for American growth are pushing both sides to consider knocking down the barriers to trade. A trans-Atlantic trade talk is underway.

Globalization has provided the world economy with an enormous amount of wealth and expansion since it first began in the 1970’s. It slowly progressed throughout the 1980’s up until the fall of the Berlin Wall, which led to a doubling of the global free-market labor force. Since then, the Dow Jones Industrial Average has climbed from 800 in 1979 to over 13,000 by 2007. The era of financial globalization went into effect in 2003, when financial services accounted for 30% of stock market earnings. For the past 3 to 5 years though, we have seen a different trend in globalization and the free flow of capital across borders.

Scientific advancements regarding genetic modifications have enhanced agricultural economies all throughout the globe.  Most recently, researchers have implemented a gene in soy that resists drought. Formerly used in sunflowers, the gene has been transferred and is being applied to soy in Brazil. Agriculture plays a prominent role in Brazil’s economy, accounting for 36% of exports; $7.9 billion alone was in agricultural exports to China. This reconstructed soy will not only allow for drought resistance, but also the ability to grow in salty soil, thus allowing soy development in previously uncultivated areas in Latin America. Of course, this expansion may lead to issues, both environmentally and economically.

The US Commercial Service is hosting a webinar to highlight the new opportunities and positive outcomes from the recent free trade agreement with Korea. The U.S.-Korea Trade Agreement took effect earlier this month on March 15th and has provided many new business and trade possibilities. Billions of dollars in tariffs are expected to be eliminated due to this new agreement. It is estimated that up to 95% of bilateral trade with Korea will be duty free within the next 5 years. This will benefit a wide variety of industries: agriculture, services, financial services, and more!

This webinar, which will detail more specific benefits, will be held on April 12th from 2-3pm EST and does require a $15 fee along with registration. To find out more information and details about the webinar, please visit the export.gov website. Here you will also find information on how to register for the webinar event!

Over the past years, free trade agreements have proven to be one of the most effective ways to open up foreign markets for businesses looking to export overseas. Trade agreements help reduce barriers for these businesses and eliminate costly tariffs on imports. The creation of more transparent trading promoted by free trade agreements also contributes to an easier environment for the exporting of goods and services. This past week, the United States-Korea Free Trade Agreement entered into full force, creating many opportunities for increased trade between the two countries.

This past year the United States passed free trade agreements with Colombia and Panama. Both these countries represent key markets in Central and South America. In fact, Colombia is the third largest economy in South America while Panama is a major maritime and air transportation hub. There are many potential opportunities for international businesses in these countries. To find out more information on the business climate, market opportunities, and finance in both Colombia and Panama, there will be a webinar hosted in February by the U.S. Commercial Service. The webinar requires a paid registration and also provides details about the benefits of the United States free trade agreements with Colombia and Panama.

The United States-Colombia free trade agreement approved just a few months ago has helped business growth in Colombia and is expected to continue to help boost Colombia’s economy. The main benefit from the free trade agreement is often seen as attractive conditions for increased exports and imports. However, some companies in Colombia see the main benefit coming from the growth of demand that the free trade agreement will likely generate. Besides these major benefits, there are also many other positives for business in Colombia derived from the newly passed free trade agreement.

This past week, the United States passed a trio of free trade agreements removing trade barriers with the countries of Panama, South Korea, and Colombia. The free trade agreements will have many impacts on international trade tendencies between these countries as the pacts will essentially eliminate tariffs faced by exporters in all four countries. Exports of each country are expected to rise as a result of the agreements and many businesses small or large will be able to compete in new markets abroad. The trade relationships between each country will dramatically change as the new trade agreements mark the biggest opportunity for exporting businesses in decades.

Over a quarter million small businesses in the United States export their products and services to other countries around the world. By doing so these businesses increase their revenues, broaden and diversify their customer base, and provide jobs for their local communities. The United States has set a goal to double exports by 2014 in order to support the addition of two million jobs for the American workforce and encourage economic growth. To reach this goal and help small businesses further increase their exports, the Office of the U.S. Trade Representative, the Department of Commerce, and the Small Business Administration have released a new Free Trade Agreement (FTA) Tariff Tool.

Wondering where to go next? The answer is easy, Korea. Approaching the top ten largest economies in the world, it is often overlooked because of its physical distance and the close proximity of its big brothers China and Japan. In fact, Korea has recently doubled its GDP and its imports from the United States. So while recent news may be bringing adverse attention to Korea, it is starting to bring to the spotlight an economy that is growing and is expected to soon become a major economic partner of the United States.

Free trade agreements (FTAs) have long been in controversy. By some they are hailed as the end all be all of economic growth, while others view them as a tool for the strong to exploit the weak, or a hindrance of worker’s prosperity. While there are degrees of truth to both arguments, the fact remains, trade increases, economic activity increases, and average wealth increases. FTAs need to be utilized with caution however, as many industries in many countries are not up to the competitive standards of the established powerhouses of developed countries. In addition, first-mover advantages often need to be cultivated in insulated environments where kinks in production can be removed and experiments explored without loss of the initial advantage. All of that being said, FTAs drive competition, and competition, in the end, is the best driver of economic growth and innovation.

Last week I had a unique opportunity to hear the Korean Ambassador to the United States, Han Duk-soo, speak at a luncheon in East Lansing, Michigan. The event was sponsored by the Global Business Club of Mid-Michigan. The ambassador has been traveling to various locations throughout the Midwest to tout the benefits of passing a Free Trade Agreement (FTA) between the United States and Korea. Currently, the agreement has been tabled by Congress due to other higher priority matters.

A lot of activity has been taking place in Africa lately.  The World Cup has been drawing constant attention to Africa, and recently five east African countries made history by forming a common market called The East African Community (EAC).  Kenyan President Mwai Kibaki launched the EAC this week with Kenya, Tanzania, Rwanda, Burundi, and Uganda all agreeing to take part in the effort. This agreement will better allow people, products, and capital across borders, leading to improved trade and employment opportunities. 

Just over six years ago, a “state of the art” free trade agreement (FTA) was signed between the United States and Chile. Since that time, a nearly perfect model of bilateral trade has ensued. In fact, the projected growth between the two countries was between 18% and 52%. Would you believe that the actual growth over this period is over 345%?! Free trade agreements have often been a source of debate because of the potential environmental and human rights impacts they have had in the past. How has this FTA impacted each country?

An integral part of the Trade North America Conference are sessions about the North American Free Trade Agreement (NAFTA). It is essential to be educated about NAFTA in order to be able to expand your business in North America.

The Trade North America Conference, happening in Detroit this week, is a great opportunity for the Midwest regional business community to learn about today’s trade climate. Underscoring the importance of the event, Undersecretary of Commerce, Dennis Hightower and former Governor of Michigan, John Engler will be speaking. The focus of the conference is to equip businesspeople with information which will enhance their ability to successfully export products to Canada and Mexico.

South Korea and India recently signed a free trade agreement. The comprehensive agreement is the first of its kind for South Korea with any of the BRIC countries, and the first of its kind for India with any major economy. The implications of the deal on the global business world are substantial:

U.S. and Peruvian exporters received good news last February, when a new trade promotion agreement between the countries took effect. The agreement has a number of upsides for both countries, such as the fact that 80% of U.S. goods exported to Peru now enter duty-free.

Check out this interview from the International Trade Administration for more details on how your business can take advantage of the agreement.

You can also learn about other trade agreements with Latin America in this interview from the Small Business Advocate

As the economy slumps, experts predict a rise in protectionism. The reasons range from obvious to interesting. Trade liberalization has the potential to decrease wages for blue-collar jobs in developed countries, which, especially in hard times, can cause political pressure to raise barriers to trade. Also, emerging markets are having a harder time exporting, which decreases their incentives to strive for freer trade. If they can't boost domestic demand, it will be hard for politicians to resist the pressure.

Last week I attended a luncheon hosted by the Global Business Club of Mid-Michigan, which focused in part on the importance of free trade. Erik Magdanz of the U.S. Department of State was the keynote speaker, and he had sparked my interest in some current free trade issues. One statistic in particular caught my attention – in 2006, countries that the United States has free trade agreements with accounted for only 7.5% of world GDP, yet they accounted for 42.6% of U.S. exports.

Recently President Bush and heads of state from 11 other nations in the Western hemisphere met in New York to sign the Pathways to Prosperity in the Americas initiative. The agreement focuses on further cementing regional “trade and investment liberalization, social inclusion, development, rule of law, and democracy.” Although the agreement is largely symbolic at this point, talks are planned for the end of the year to discuss possible policy changes that can advance the goals of the initiative. In his formal announcement of the agreement, president Bush declared that the deal provided “a forum where leaders can work to ensure that the benefits of trade are broadly shared,” and expressed optimism that cooperation would enhance and strengthen the relations between all signatory nations.