International Trade Agreements

The use of International Trade Agreements (TTA) to achieve both domestic and international trade policy objectives is clearly increasing. Since 1985, the United States has negotiated TTA with Israel and Canada, and a regional agreement with Mexico and Canada. A trade-creating TTA may also increase the welfare gains of nonmembers, since some of the increase in its economic growth will produce real increases in income that will in turn translate into increased imports from the rest of the world. If efforts to liberalize world trade through the General Agreement on Tariffs and Trade (GATT) are unsuccessful, it appears likely that TTA will take on added importance as policy tools for negotiating fewer barriers to trade among groups of nations. The United States is one of 23 charter members of the multilateral trade organization known as GATT, or the General Agreement on Tariffs and Trade, founded in 1948.