Free trade agreements (FTAs) have been a hot topic in recent times, with many people debating their effectiveness and impact on the global economy. In order to understand the origins and purpose of these agreements, it is important to examine the history of their creation.
The concept of free trade can be traced back as far as the 18th century, when economists such as Adam Smith and David Ricardo began championing the benefits of international trade. However, it wasn`t until the aftermath of World War II that FTAs began to be created on a large scale.
One of the first significant FTAs was the General Agreement on Tariffs and Trade (GATT), which was signed in 1947 by 23 nations. The goal of the agreement was to promote international trade by reducing tariffs and other barriers to trade. Over time, GATT expanded to include more countries and evolved into the World Trade Organization (WTO), which remains a key player in global trade today.
In addition to GATT, there have been numerous other FTAs created in the decades since World War II. Many of these agreements have been bilateral or regional in nature, meaning they involve only a few countries or a particular geographic area. Some of the most well-known FTAs include:
– NAFTA (North American Free Trade Agreement), which was signed in 1994 by the United States, Canada, and Mexico. NAFTA eliminated many tariffs and other trade barriers between the three countries, and has been credited with boosting trade between them.
– TPP (Trans-Pacific Partnership), which was negotiated between 12 countries including the United States, Japan, and Australia. The agreement aimed to create a free trade area among the nations and was seen as an important part of the Obama administration`s efforts to increase American economic influence in the Asia-Pacific region.
– TTIP (Transatlantic Trade and Investment Partnership), which was negotiated between the United States and the European Union. The agreement aimed to create a free trade area between the two entities, but negotiations were ultimately halted in 2016.
So who exactly creates these FTAs? The answer is that it varies depending on the agreement. Some FTAs are negotiated and signed by individual countries, while others are the result of multilateral negotiations involving multiple countries and international organizations like the WTO.
In the case of bilateral FTAs, negotiations are typically led by government officials and trade experts from each country involved. These negotiators work to reach agreement on a variety of issues related to trade, including tariffs, intellectual property rights, and labor standards.
Overall, the creation of FTAs is a complex and often contentious process. Supporters argue that these agreements can promote economic growth and create jobs, while opponents claim that they can lead to job losses and harm domestic industries. Regardless of one`s views on FTAs, it is clear that they have played an important role in shaping the global economy in recent decades.