A better solution than protectionism is to include rules in trade agreements that protect against inconvenience. Free trade agreements are treaties that regulate the tariffs, taxes and tariffs that countries collect for their imports and exports. The most well-known regional trade agreement in the United States is the North American Free Trade Agreement. Reality: it is the overall level of trade – exports and imports – that most accurately reflects American prosperity. Wealth is defined by the breadth and diversity of what Americans can consume. More exports increase prosperity only because they allow Americans to buy more imports and encourage more non-Americans to invest in America, which helps the U.S. economy grow. The restriction of imports makes Americans less well off. There are already some 400 free trade agreements in the world (including free trade agreements in the planning phase). They are complex and create what is called a “spaghetti effect.” In addition, the negotiations expect multilateral free trade agreements to be concluded that are only considerable in terms of the economic dimension, the population that covers them and the number of countries in which they participate. In addition to existing agreements, global economic partnerships are increasingly complex and complex. Reality: the only beneficiaries of trade restrictions are inefficient companies and special interests working to protect them from competition.
The main criticism of free trade agreements is that they are responsible for outsourcing employment. There are seven total disadvantages: the specific categorization of products (SPC) permanently exempts sensitive products from liberalisation. In a scenario where the sector with the highest current tariff revenues would be excluded from liberalization, UNCTAD simulations estimate a long-term wealth gain of $10.7 billion. Revenue is expected to fall to $3.2 billion (or 7.2% of current customs revenue). GDP and employment growth are expected to increase by 0.66% and 0.82% respectively. Intra-African trade is expected to grow by 24%, while Africa`s trade deficit will fall by only 3.8%. (6) Despite the many benefits that this agreement will bring, not all countries should benefit in the same way from the free trade agreement. While the expected average GDP growth is around 1%, growth in some countries is expected to be above 3%, while in some others, contraction is expected (Chart 5). Chart 6 shows that, in the PSP scenario, fewer countries suffer customs losses of more than 20% than the full scenario of the FREI trade agreement. (6) Industrial products accounted for 43% of intra-African exports between 2012 and 2016, while only 20% of exports to the rest of the world. In 2015, medium and advanced technology products accounted for 25.4% of intra-African trade, but accounted for only 14.1% of African exports to industrialized countries and 13.7% of the continent`s exports to the world (Chart 2).
(6) (8) African heads of state and government from 44 African nations met at the African Union summit in Kigali, Rwanda, from 17 to 21 March 2018 and signed the Continental Free Trade Treaty (AfCFTA) for the creation of the world`s largest internal market. The agreement will be the largest trade agreement in history since the creation of the World Trade Organization.