Free trade agreements (FTAs) are
generally made between two countries. Many governments, throughout the
world have either signed FTA, or are negotiating, or contemplating new
bilateral free trade and investment agreements.
The agreements are like stepping stones towards international
integration into a global free market economy. There are another way to
ensure that governments implement the liberalisation, privatization and
deregulation measures of the corporate globalisation agenda.
It is assumed that free trade and the removal of regulations on
investment will head to economic growth reducing poverty and increasing
standards of living and generating employment opportunity.
Past evidences show that these kinds of agreements allow transnational
corporations (TNCs) more freedom to exploit workers shaping the national
and global economy to suit their interests. In simple terms it removes
all restrictions on businesses.
FTAs severely constrain future governments in their policy options and
help to lock in existing economic reforms which may have been imposed by
the IMF, World Bank or Asean Development Bank, or pursued by national
governments of their own volition. It work towards removing all
restrictions on businesses as other free trade and investment agreements
perform.
FTAs are sometimes of narrow range in their dealing of traded goods.
You can note the US-Cambodia bilateral textile trade agreement which was
extended in January 2002 for a further 3 years.
India and Sri Lanka signed a free trade agreement in December 1998 with
India agreeing to a phase out of tariffs on a wide range of Sri Lankan
goods within 3 years, while Sri Lanka agreed to remove tariffs on Indian
goods over eight years. One of its objectives which was stated was to
contribute, by the removal of barriers to bilateral trade "to the
harmonious development and expansion of world trade".
Other FTAs are much more comprehensive and cover other issues including
services and investment. These agreements generally take existing WTO
agreements as their benchmark. They often strive to even go further than
what is set out in the WTO rules.
