Trade Agreements

Abstract

A majority of economists seems to prefer a multilateral system of trade within the WTO. In practice, most trade in the world is processed through trade agreements among countries. There appears to be also a majority of economists that criticizes not only the system of trade agreements but also individual trade agreements. The first section below introduces the characteristics of the various types of trade agreements. This is followed by the analysis of whether trade agreements promote the welfare of the members and of the world. Several sections consider the major trade agreements: the European Union, NAFTA, the Asia-Pacific Economic Cooperation (APEC), the Association of South East Asian Nations (ASEAN) and the Common Market of the South (MERCOSUR). The final section considers the Organization of Petroleum Exporting Countries (OPEC), which coordinates output and price policies of the major oil-producing countries. Some conclusions are listed in the summary.