The global trade environment is a complex and dynamic system that consists of a multitude of economic, social, and political factors (Redmond, 2020). Globalization has led to the interdependence of countries on each other's markets, giving rise to a need for a stable and inclusive global trade environment (Vargas, 2022). This literature review explores the various aspects of the global trade environment, including its history, its current state, and the challenges and opportunities it presents. The history of global trade can be traced back to the Silk Road, which facilitated trade between Europe and Asia (Aritua, 2021). During the colonial era, European powers established trade links with their colonies, creating a global trade network (Liu, 2020). After international battle II, the overall agreement on price lists and change (GATT) turned into installed to promote loose alternate and decrease exchange boundaries. In 1995, the sector trade enterprise (WTO) become created to replace GATT and adjust international change (Herbert, 2020). Overall, the global trade environment is a complex and multi-faceted system that presents both challenges and opportunities (Doh, 2021). While protectionism and trade disputes pose significant challenges, there is also immense potential for growth and development in the global trade landscape. The key to a stable and inclusive global trade environment lies in cooperation, collaboration, and open dialogue between nations (Bathelt, 2022). The World Trade Organization (WTO) plays an important role in facilitating global trade relations between countries. It is responsible for ensuring that international trade runs as smoothly, predictably and freely as possible by creating and enforcing the rules and regulations that govern trade between member countries (Chaisse, 2023). The WTO provides countries with a platform to negotiate and resolve trade disputes and helps promote economic growth and development through trade liberalization. Its role in promoting fair and equitable trading practices is essential to ensure that all countries, regardless of size or economic situation, can benefit from the opportunities offered by the global trading system (Hoekman, 2020).
The main difference between these categories of preferential trade agreements is the number of participating countries and the scope of the agreement, with bilateral agreements being the smallest and multilateral agreements being the largest. So while bilateral agreements benefit only her two countries, multilateral agreements can have broader implications for the global economy (Hoekman, 2021). The North American Free Trade Agreement (NAFTA) has created dynamic trade ties between its three signatories: the United States, Canada and Mexico. The agreement eliminated most tariffs and trade barriers and facilitated the growth of cross-border trade and investment (Aathif, 2021). NAFTA also increased competition among signatories, leading to the reallocation of resources and the creation of new industries. However, the deal has drawn criticism in some sectors, particularly the United States, who believe NAFTA has caused job losses and trade deficits continue to work together to improve agreements and address concerns (Ariff, 2021). The four most important preferential trade agreements in Latin America are MERCOSUR, the Pacific Alliance, the Central American Integrated System "SICA", and the Andean Community. Mercosur consists of Argentina, Brazil, Paraguay and Uruguay, with associated members including Bolivia and Chile (Kamath, 2020). Another major agreement is the ASEAN Free Trade Area (AFTA). AFTA includes most Southeast Asian countries and promotes economic integration and cooperation within the region. In addition, China has several bilateral agreements aimed at reducing tariffs and facilitating trade between participating countries, such as the China-Korea Free Trade Agreement and the China-Australia Free Trade Agreement (Shimizu, 2021).
There are several forms of economic integration in Europe. The first is a free trade zone, which eliminates tariffs and trade barriers on goods traded between member countries (Ndonga, 2020). The second is a customs union that sets common external tariffs on goods traded with third countries (Ishikawa, 2021). The third is a common market that allows the free movement of goods, services, capital and persons between member states (Genschel, 2021). The fourth is an economic union with harmonization of economic policies and regulations, a common currency and a common monetary policy (Anderrson, 2020). Finally, there are political federations, in which member states establish supranational government agencies and share decision-making authority on economic and other policies. These forms of economic integration promote economic cooperation, efficiency, and competitiveness among member countries (Buti, 2023).
CHAPTER III DISSCUSION
A. The role of the World Trade Organization in facilitating global trade relations between countries.
Against this background, it can be seen that the world trade organization currently has a very important role. Several world economists and global economic policy makers are beginning to understand that in conducting international trade special policies are needed to regulate international tradeThe role of overseas exchange in the technique of monetary improvement, both at once and not directly, is that it can boom forex profits, switch capital and era from overseas and may increase new industries (Muchtar, 2021). This is because their goal is to promote the development of the world economy and its countries, as well as to reduce poverty around the world. Therefore, the International Trade Organization was established to regulate and control international trade policies. This company is referred to as the arena trade company or WTO (Chandraulan, A. A., & SH, L, 2022). the sector alternate organisation (WTO) is a international business enterprise that regulates alternate among countries. founded in 1995, this organization is a continuation of the general agreement on exchange and trade (GATT) formed after the second one world war.) the principle task of the sector exchange organisation is to ensure that alternate among member countries runs easily, reliably and as freely as possible. thus, the desired welfare may be performed exactly (Thomas and Jeffry, 2021). WTO is a international change employer primarily based in Geneva, Switzerland. This organisation become established on January 1, 1995 due to the Uruguay/Uruguay Circle negotiations (1986-1994) and presently consists of a hundred and fifty nations in line with (Echdar, S, 2020). WTO took over the role of GATT which aims to maintain an open and free international trading system. The WTO is responsible for enforcing the multilateral rules governing international trade and comprises three main legal instruments and dispute resolution mechanisms. The following is a further explanation of the four relevant issues (Suherman, A. M , 2022)
B. Compare and contrast the four categories in preferential trade agreements
Preferential change Agreements (PTAs) are worldwide trade agreements among two or more nations that reduce or dispose of price lists on certain goods and services traded between them (Kalirajan, 2022). There are unique varieties of PTAs, and that they can be labeled into 4 categories (Ji, zhu ,2020) : loose alternate area (FTA), Customs Union (CU), commonplace marketplace (CM), and financial Union (european). free alternate region (FTA), an FTA is a PTA wherein participating countries conform to get rid of or reduce price lists on items and services traded between them, even as preserving their personal exchange regulations with non-member countries (Gurtu, Johny, 2022). The purpose of an FTA is to sell loose alternate and raise economic growth by means of facilitating the motion of products and offerings across borders (Mlambo, 2022). Customs Union (CU), a CU is a PTA wherein collaborating countries agree now not only to get rid of or lessen price lists on goods and services traded between them, however additionally to undertake a not unusual external tariff on imports from non-member nations (Yao, Zhang, 2021). because of this once goods enter any of the international locations within the CU, they could flow freely in the union with out facing extra tariffs (Bown, 2021). The purpose of a CU is to promote trade amongst member nations and shield them from unfair opposition from non-member nations (Totic, 2020).
Common Market (CM), a CM is a PTA where participating countries agree not only to eliminate or reduce tariffs on goods and services traded between them, but also to adopt a common market for labor and capital (Dadush, 2023). This means that citizens of member countries can move freely across borders to work, study, and invest. The purpose of a CM is to promote economic integration and facilitate the movement of factors of production across borders. Economic Union (EU), An EU is a PTA where participating countries agree not only to eliminate or reduce tariffs on goods and services traded between them, adopt a common external tariff, and establish a common market for labor and capital, but also to adopt a common monetary and fiscal policy (Al-ghazali, 2020). This means that member countries share a single currency, and their economic policies are coordinated to ensure macroeconomic stability and convergence. The purpose of an EU is to promote deep economic integration and create a common economic space among member countries (Mattoo & Ruta, 2020). In summary, the four categories of PTAs differ in the degree of economic integration they achieve among participating countries (Ishikawa, 2021). An FTA promotes free trade, a CU promotes trade and protects members from non-member countries, a CM promotes the movement of factors of production, and an EU promotes deep economic integration and coordination of economic policies (Kedir, 2020).
C. Dynamics of trade relations among the signatories of the North American Free Trade Agreement
The North American loose change settlement (NAFTA) is a local change agreement between america, Canada, and Mexico that went into impact in 1994 (Zahniser, 2020). It created a free change sector, eliminating price lists on items and offerings traded among the 3 countries (Olayiwola, 2020). NAFTA has been a subject of dialogue seeing that its inception, with proponents touting its advantages to financial increase, task introduction, and customer prices, at the same time as critics argue that it has caused task losses, wage stagnation, and environmental degradation (Dellmuth, 2021). The dynamics of exchange family members a number of the signatories of NAFTA have evolved through the years, with the settlement being renegotiated in 2018 and replaced by means of the usa-Mexico- Canada agreement (USMCA) in 2020 (Anderson, 2023). The USMCA includes updates to the original agreement, such as increased regional content requirements for automobiles, improved labor and environmental standards, and provisions related to digital trade and intellectual property rights (Villarreal, 2020).
