Trade agreements reduce barriers to trading between countries by setting rules that set the terms for how countries can sell each other’s products and services. These agreements can also make it easier to invest in other countries, and to promote and develop trade-related policies. They also help businesses to operate in a predictable environment where the costs of inputs and prices of outputs remain stable and consistent.
The main type of trade agreement is a Free Trade Agreement (FTA). FTAs can have many provisions including zero or reduced tariffs that make it easier for your business to compete in international markets and create jobs. They can also include other requirements such as rules of origin that must be met for goods to qualify for preferential duty rates. New Zealand seeks to ensure that rules of origin are neutral, do not favour producers of inputs over producers of final goods or one industry sector over another. We also advocate for FTA provisions that improve the speed and transparency of import, export, transit and transshipment related customs procedures.
Other types of trade agreements include Trade and Investment Framework Agreements which provide a forum for the early resolution of trade and investment issues. The United States also has a number of Bilateral Investment Treaties (BITs) which protect private investment, develop market-oriented policies in partner countries and promote U.S. exports. Detailed descriptions and texts of these and other trade agreements can be found in our Trade Agreement Resource Center.
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