Bilateral trade agreements can be defined as the trade of goods and services between countries. The relevant countries will adjust or entirely remove restrictions on imports and exports. These actions could improve trading conditions between the countries involved – making trade between countries more comfortable and more cost-effective. This may also give rise to more investment opportunities from abroad.
Multilateral trade agreements refer to trade policies that have been set up to include more than two countries. It is arguably more challenging for several countries to come to a particular trade agreement than it is for two countries – with approval required from more government institutions.
The European Union’s Free Trade Agreements
The European Union has set up many of these free trade agreements over the years. However, all trade agreements evolve and adapt over time. Policies that are agreed to at a point may only be valid for a certain period. The European Union is continuously at work to develop and adapt agreements to remain relevant and impartial to the nations involved – making it easier for businesses to go about their business abroad.
Asian countries such as China and Japan have long set up trade agreements between other countries. China is known for its highly industrialised economy – exporting an extensive range of goods and services to the rest of the world.
The Chinese economy and middle-class have grown considerably over the past few decades. Trade agreements have resulted in the delivery of trendy goods from the east, such as sushi and exotic Asian spices.
The impact on the Labour market
Effective trade agreements may result in exponential growth industries – thousands of people being employed can follow this. The Labour market, therefore, benefits greatly from international trade. There are also numerous business opportunities for entrepreneurs. Labour market growth is highly beneficial for a country as it lowers the unemployment rate and increases the country’s overall GDP.