Explain an Unilateral Agreement.

What do you meant by an Unilateral Agreement?

 

Unilateral Agreements

Unilateral free trade simply means that one country reduces its import restrictions without any formal agreement for reciprocation from its trade partners. They are trade incentives an importing country offers in order to urge the exporting country to engage in international economic activities that will enhance the economy of exporting country. A unilateral trade agreement is technically not an agreement, but the actions of one country to expand its market and reform its economy. Commonly, unilateral initiatives are offered to developing countries or countries that are encouraged to steer away from export of illegal drugs. The incentives typically include reduced duty rates, for which the exporting country will eligible if certain thresholds are met. The most common program is the General System of Preferences, an almost global program where the developed/wealthier countries give trade incentives, including duty rate reductions, to the developing countries.

In unilateral, other nations have no choice in the matter. It is not open to negotiation. It doesn't require other nations to do the same.


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