Bilateral Trade

Bilateral Trade is an agreement where two countries agree to have equal amounts of trade between each other. It means if one country has a trade deficit, it has to be made up so that the trade levels meet. This is inferior to multilateral trade where a country trades with numerous other countries and doesn’t worry about bilateral trade deficits.

Bilateral Trade Agreements

This is an agreement between two countries, or between two trading blocks. It means that they may agree to reduce tariffs between each other but at the expense of other countries not in the bilateral trade agreements.

Examples of Bilateral trade agreements

  • ASEAN – China Free Trade Area (ACFTA), in effect as of 1 January 2010
  • EU – Japan Economic Partnership Agreement (2018)
  • US – EU United States (TTIP – Transatlantic Trade and Investment Partnership) – in negotiation.

Free trade areas

Free trade areas around the world.




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