Benefits of international trade agreements

Advantages of International Trade

Trade agreements are significant because different countries have relative advantages in the production of certain goods. When one country produces a good that another country needs, the trade agreement is straight forward; both countries benefit by granting open trade of that good. The producing country gains access to new consumers and the importing country gains access to required goods. Some benefits of Trade Agreement like, reducing tariff barriers leads to trade creation, Increased exports, Economies of scale, Increased competition, Make use of surplus raw materials etc.


When picking nations for export or import consider following advantage of international trade agreements:


a. Simplified access to broadened customer base

b. Cutting exporters foreign market penetration costs because of the elimination, reduction or simplification of customs duties and processes and regulatory requirements

c. Optimization of supply chain by managing with suppliers from countries under the international agreement with your country

d. Improvement of manufacturing operations by moving it abroad partially or completely

e. Simplified access to foreign investors and financial institutions to satisfy financing needs better

f. Simplified access to foreign labor force and simplified access of your employees to target markets


These were some advantages beenefited by international traders because of trade agreements.

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