Understanding the Rules of the Game

More In Thinking About Exporting

Trade Agreements

The majority of the world's trade and business relationships are determined by Trade Agreements.  These agreements can be between either two countries (bilateral) or three or more countries (multi-lateral). They can range from simple agreements to reduce the level of tariffs on specific products, to detailed foreign investment rules that are negotiated between many countries, to full-fledged international trade treaties that most countries adhere to, such as the World Trade Organization. 

Trade Agreements can be a powerful incentive in your choice of a market. If your chosen country has a Free Trade Agreement with Canada, then the tariff rates you would normally have to pay may be eliminated all-together or substantially reduced. There may also be other advantages to doing business in a country that has a trade agreement such as easier customs controls, no quotas and preferential.

Each and every agreement has been created differently, it is therefore advised to look at the relevant agreement in detail and ask for guidance from a trade advisor about the implications of these on your business.

To find out a full list of the trade and investment agreements that Canada is involved in visit the Foreign Affairs and International Trade Canada website.

Trade Networks

Over the past forty years, countries in various regions of the world have come together to form ‘regional trade networks’. These include: the European Union, The North American Free Trade Area and the Association of South east Asian Nations (ASEAN). The purpose of these agreements was: to enhance trade between the partners and to have a greater say within international organizations like the World Trade Organization. The major benefit of doing business with a country in a regional trade network is that once your products are in one country in the network they can be sold in the other countries in the network tariff free.

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