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How can trade agreements assist development?
A trade agreement is while two or more countries to by decrease or abolish tariffs, non-trade and quotas barriers which are establish favourable terms and conditions for trade.
A trade contract can be in between two countries (bilateral) or several countries or multilaterals. Multilateral trade agreements comprise:
• Free trade area where quotas, tariffs and non trade barriers are decreased but member countries adopt various trade policies in the direction of non-members
• Customs Union along with decreased trade restrictions among embers and common trade policies in the direction of non-membersDecreased trade barriers among countries are a move in the direction of economic integration- the integration of national economies to form a general market. The result of integration is a blurring of national boundaries, raised specialisation and trade based upon comparative advantage. The theory of comparative benefit suggests an overall welfare grow for both countries.
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