Trade Agreement Types in Economics - Assignment Example

Under a customs union, member countries engage in free trade while maintaining a uniform tariff policy for trade activities involving non-member countries. With a customs preference agreement, countries that sign the agreement are assured of preferential customs levels, unlike countries that are not part of the agreement. Under an economic union, economic policies are integrated for member countries. This means that members of an economic union enjoy the same trade policies as well as unified economic regulations and policies. A common market takes a customs union a step further to account for eliminated barriers when it comes to the movement of factors of production. Finally, political integration combines most or all of the above-discussed trade agreements.

Q.2
Jagdish Bhagwati supports free trade agreements and subsequently connects them to the welfare of society. He argues that free trade agreements translate to better living standards unlike trade barriers, restrictions, or sanctions. Moreover, Jagdish Bhagwati contends that social and environmental issues are better addressed through free trade agreements. In other words, Jagdish Bhagwati supports the concept and practice of free trade agreements in almost every aspect of a contemporary global society. Read More