Every entrepreneur seriously dealing with trade sooner or later will start thinking about cooperation with foreign entities. It can be both export and import of products, taking place in cooperation with themselves or with wholesalers. International trade brings many benefits, however, in order to approach it, you need to familiarize yourself with international regulations that regulate the cooperation of entrepreneurs from different countries of the world. Today we want to introduce you to a list of the most important trade agreements, both in Europe and in other parts of the globe.

What are the benefits of international trade agreements?

An international agreement is a consensual declaration of the will of states that produces legal effects. States and international organizations may be parties to such agreements. Such agreements constitute a source of international law and regulate international relations. Most often they concern human rights (e.g. the United Nations Charter) and trade. Depending on the number of parties acceding to the agreement, we divide them into bilateral (bilateral) and international acts. Today we will focus on the latter.

Each country in the world has its own legal and tax regulations. The need to strictly comply with the regulations of a particular country (both exporting and importing) is an issue that greatly hinders the free exchange of goods. In order to facilitate international exchange and enable cooperation between entrepreneurs from different parts of the world, international trade agreements are created.

The main purpose of international trade agreements is to create a legal framework to regulate trade between countries. Such agreements aim to increase the flow of goods, services and capital between countries and reduce trade barriers such as tariffs and quality standards regulations. They liberalize trade and support international cooperation of enterprises. This allows companies from different countries to import and export their products more easily, which leads to increased competition in the market and improved production efficiency. As a result, countries can benefit from greater competition and employment, and customers can benefit from a wider range of products at lower prices. In addition, international trade agreements can also serve as a foreign policy tool, allowing countries to establish better relations with other countries through joint economic activities. Nowadays, one cannot forget about the globalization of many processes, including communication and trade. Each of the countries strives for progression in substantive areas - such as trade - and in line with globalization, international trade should be allowed to anyone who wants to participate in it. Such a situation requires activity beyond numerous limitations. And these restrictions can be lifted by international trade agreements.

International agreements and food trade

Of course, it is impossible to get rid of all regulations and regulations, as this would lead to chaos in the international commercial arena. Legal acts enable free trade in goods, while regulating the most sensitive issues that allow to maintain the quality of products, the principles of fair competition and the protection of the rights of both consumers and entrepreneurs. This is particularly important in the case of trade in food products. It is also worth noting that food exports may increase prices on the domestic market and affect the availability of food on the domestic market. Therefore, food exports should be conducted in a sustainable manner, taking into account the needs and interests of consumers, producers and the entire food sector.

What contracts should entrepreneurs related to the food industry be familiar with?

Trade Agreements for Food Trade in Europe.

  1. Agreement on Cooperation and Mutual Assistance in Food Safety (RASFF) - this agreement provides an alert mechanism for EU Member States when food hazards are detected.
  2. European Animal Identification and Registration System (EIDR) - this system was introduced to ensure the safety and quality of animal products in the EU.
  3. EU agricultural policy (CAP) - this policy is a set of instruments and regulations aimed at supporting and regulating agricultural production in the EU.
  4. Free Trade Agreement between the EU and the Community of West African States (EPA) - This agreement aims to increase trade between the EU and West African countries, including food trade.
  5. Food quality schemes - The EU has a number of food quality schemes, such as DOP, IGP and STG, which are used to protect and promote traditional and regional products in the EU.
  6. European Food Safety Agency (EFSA) - this agency aims to ensure food safety in the EU by assessing food risks and hazards.
  7. EU-Canada Free Trade Agreement (CETA) - This agreement introduces a number of changes to food trade between the EU and Canada, including the removal of certain tariffs and the adjustment of sanitary and phytosanitary standards.
  8. EU-Japan Economic Cooperation Agreement (EPA) - this agreement covers many sectors of the economy, including food trade.

Food exports from the European Union can be beneficial for Member States as it allows them to increase their profits from food production and strengthen their position on the international market. In addition, export allows to increase the competitiveness of the agri-food sector and contributes to economic development. One may be tempted to say that the EU's foreign policy in the context of trade agreements is an effective policy - the largest global exporter of agri-food products is the European Union.

The most important trade agreements on a global scale

  1. North America Free Trade Agreement (NAFTA) - a trade agreement between the US, Canada and Mexico.
  2. Trans-Pacific Partnership (TPP) - a trade agreement between 12 countries, including the US, Japan, Australia, Canada and Mexico, which was signed in 2016.
  3. Transatlantic Trade and Investment Partnership Agreement (TTIP) - an agreement between the US and the European Union that aimed to create free trade between the two regions.
  4. Korea-U.S. Free Trade Agreement (KORUS) - A trade agreement between South Korea and the U.S. that was signed in 2012.
  5. Canada-EU Free Trade Agreement (CETA) - A trade agreement between Canada and the EU that was signed in 2016.
  6. Japan-EU Free Trade Agreement (JEFTA) - A trade agreement between Japan and the EU that was signed in 2018.
  7. ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) - A trade agreement between ASEAN countries, Australia and New Zealand.
  8. Free Trade Agreement of the Free Trade Area of the Americas (FTAA) - a proposal to create a free trade area between 34 states in America.

Commercial cooperation with foreign partners can bring numerous benefits to the company and lead to increased sales and revenue growth. Thanks to international exchange, you can find new markets, as well as gain access to new technologies, products or services, which allows you to diversify your own offer and make it more attractive than the offer of your competitors. Financial aspects should also not be forgotten: partnerships with foreign companies may allow access to cheap raw materials or production in cheaper countries, which may lead to lower production costs and increased margins.

 

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