A trade agreement, as made clear from the term itself, is a contract signed between two or more countries regarding the trading of certain goods, products and services from one’s home nation to another country or vice versa. This type of a transaction generally involves taxes being levied on the import or export of goods and items, although the United States of America conducts and signs free trade agreements (FTA) with most other nations. The primary objective of the United States in signing these agreements is to reduce U.S export barriers and protect the trade interests of the State, thereby enhancing the rule of law in the other country involved in the pact and hence ensuring better trade relations. This type of a contract is very popular in the trading world of the United States because of the cheaper costs it provides to the export of U.S goods to other countries. Trade agreements are generally negotiated in the World Trade Organization (WTO), which determine the trade behaviour of all the countries involved.
The United States has signed a number of trade agreements, most of them being FTAs, with various countries including Australia, Israel, Oman, Peru, Bahrain, Singapore, Jordan, New Zealand, Malaysia, Vietnam, Chile, etc. The agreement contracts may include different trade aspects, but the basic structure of framing the agreement documents complies with a set standard, which remains the same for all U.S trade agreements but may be different in behaviour for other countries.
A trade agreement, whether an FTA or not, should necessarily include the following particulars: