Trade agreements help companies compete more easily in international markets. They fuel economic growth, encourage investment, and help resolve behind-the-border barriers that impede the flow of goods and services. They often lower or eliminate tariffs, promote intellectual property protection, establish standards and procedures for government procurement and more. While many trade agreement provisions can be complex, they typically follow a standard basic structure.
The preamble describes the parties to the agreement, confirms their common goals for developing their economic relations and acknowledges their existing mutual commitments to liberalizing trade. This chapter and its annexes describe to what extent and how quickly the parties will reduce or eliminate duties for products traded between them. Usually there is a separate annex listing specific commitments for each product category. The chapter usually includes a most-favoured-nation status clause and national treatment provisions that limit the ability of a party to impose higher duties on goods imported from another country, except when necessary to address harmful trade practices such as dumping and countervailing subsidies.
Most of the remainder of the chapters are related to nontariff restrictions, including regulations such as selective excise taxes, sales and use taxes, quotas, special health requirements, import licensing, customs valuation and other rules that can impact trade. They may also cover specific provisions for competition law, investigations and sanctions related to trade cartels and abusive behaviour by companies with a dominant market position as well as rules on state-owned enterprises and other forms of government-sponsored discrimination.
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