The International Import Export Business Can Be Very Lucrative
While much of the action in the international import export business is in contracts and agreements between companies or individuals, the terms of these contracts may be affected by legal stipulations that govern trade relationships. Most countries have laws that define how goods may be imported or exported, but many also are governed by international treaties. These may have an impact on your international import export company, as well.
The European Union
Though far more than just a trade treaty, the European Union does affect international import export businesses, especially those that operate within EU countries. The EU created a single economy with a single currency, which simplified economic transactions. It also eliminated controls on movements of people, goods, services, and capital within its member states. This has simplified trade both between EU countries and between EU and non-EU (third world) countries.
The North American Free Trade Agreement
The North American Free Trade Agreement (NAFTA), which went into effect in 1994, is a regional agreement between the United States, Canada, and Mexico. These three countries agreed to phase out tariffs on material goods and to reduce restrictions on trade in services and on foreign investments. NAFTA has significantly simplified international trade between these three countries, with the relationship between Canada and the US becoming particularly close. Many international import export companies in the US trade primarily with Canada.
The Association of Southeast Asian Nations Free Trade Area
The Association of Southeast Asian Nations (ASEAN) is similar to the European Union in that it has a large number of signatories (10) and it created an economic and geopolitical organization. It was founded to encourage economic development among its member states. More recently, ASEAN has negotiated a free trade area (AFTA) among its member states, which is a prelude to more complete economic integration. Tariffs between ASEAN’s member states are lowered, though they retain the right to charge non-ASEAN countries whatever tariff percentage they desire.
Other International Import Export Trade Agreements
Bilateral and multi-lateral trade agreements between individual nations or between these larger groups of nations are becoming more and more common as the global economy becomes more integrated. Many of these new trade agreements include free trade or reduced tariffs between the signatory nations. The goal is to make international import export freer and at the same time more lucrative for everyone involved.
The World Trade Organization
The World Trade Organization (WTO) is not an international import export treaty organization, but rather an international body that helps to set the ground rules for international trade. The WTO is committed to keeping trade flowing as freely as possible without undermining national governments or endangering people or the environment. The organization’s agreements are negotiated between member countries and have been signed by the majority of countries in the world.
The WTO also provides a International Import Export trade dispute resolution process.
This list of trade agreements and treaties merely scratches the surface of the number of such treaties in existence. Make sure you read up on the ones that may impact your international import export business!
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