Trade Agreements

Economic Integration is the process of nations becoming more interdependent and economically unified with each other.

Preferential Trade Agreements are forms of economic integration that involves multiple countries commit trade treaties with each other, ensuring each side receive favorable conditions.

There are 3 levels of trade agreements the IB wants you to know:

Bilateral Trade Agreements

• Ones between 2 countries in order to reduce barriers to trade.

Regional Trade Agreements

• Ones between more than 2 countries, but often confined to a certain region. 

Multilateral Trade Agreements

• Ones between more than 2 countries, but under supervision and guidance by the World Trade Organization.