reciprocal trade agreement

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reciprocal trade agreement,

international commercial treaty in which two or more nations grant equally advantageous trade concessions to each other. It usually refers to treaties dealing with tariffs. For example, one nation may grant another a special schedule of tarifftariff,
tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic industries
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 concessions in return for equivalent advantages. Originally reciprocity agreements involved bilateral tariff reductions that were not to be extended to third countries. In the 18th cent., England relaxed its Navigation Acts in return for similar action by other nations. In the 19th cent. the German ZollvereinZollverein
[Ger.,=customs union], in German history, a customs union established to eliminate tariff barriers. Friedrich List first popularized the idea of a combination to abolish the customs barriers that were inhibiting trade among the numerous states of the German
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 was based on reciprocity, and the system of reciprocity fostered by Napoleon III worked strongly in favor of free tradefree trade,
in modern usage, trade or commerce carried on without such restrictions as import duties, export bounties, domestic production subsidies, trade quotas, or import licenses.
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. After the downfall of the French Second Empire (1870), many European countries began to follow a policy of high tariffs. In the United States reciprocity was advocated as part of the tariff policy after 1880. The use of the most-favored-nation clausemost-favored-nation clause
(MFN), provision in a commercial treaty binding the signatories to extend trading benefits equal to those accorded any third state. The clause ensures equal commercial opportunities, especially concerning import duties and freedom of investment.
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 after 1922 resulted in a widespread exchange of tariff concessions; it was followed by the Trade Agreements Act (1934). Since 1948 the general policy of the United States has been to negotiate reciprocal tariff concessions within the framework originally established by the General Agreement on Tariffs and TradeGeneral Agreement on Tariffs and Trade
(GATT), former specialized agency of the United Nations. It was established in 1948 as an interim measure pending the creation of the International Trade Organization.
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 (GATT). The Trade Expansion Act (1962) provided for negotiations, under GATT auspices, to expand reciprocal trade agreements, especially with the European Economic Community, or Common Market (now part of the European UnionEuropean Union
(EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community (EC), an economic and political confederation of European nations, and other organizations (with the same member nations)
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). The act resulted in the Kennedy Round (1964–67) and the Tokyo Round (1974–79) of GATT talks, which produced reciprocal tariff reductions, mainly between the United States and W Europe, and new rules on customs and duties. GATT's Uruguay Round (1986–93) culminated in the creation (1995) of the World Trade OrganizationWorld Trade Organization
(WTO), international organization established in 1995 as a result of the final round of the General Agreement on Tariffs and Trade (GATT) negotiations, called the Uruguay Round.
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. Reciprocal agreements may also deal with such matters as rights of foreigners and consular relations.
References in periodicals archive ?
Under the new trade pact, China will reduce its average tariff on agricultural products to 17 per cent by 2004.
And other potential free-trade partners, such as Chile, won't dare negotiate the bottom line of any trade pact if they believe that it can be picked apart by Congress.
Summary: Asia-Pacific: Asia-Pacific nations will launch negotiations for two giant free trade pacts Tuesday that diplomats .
Most of the products he exports are Chinese-made, but with an eye toward the trade pact, he has been adding more U.
The ministry says the free trade pact has greatly contributed to the expansion of trade and investment between the two countries.
Taiwan hopes to sign trade pact with China in May: Taiwan hopes to sign a trade pact with China in May, to prevent the island from being marginalized following increasing integration between China and Taiwan's major export competitors in Southeast Asia, says Taiwan Premier Wu Den-yih.
Islamabad, May 13 (ANI): Pakistan's Foreign Minister Shah Mahmood Qureshi has said that India has no connection with the Pak-Afghanistan transit trade pact.
Korea and the US agreed on a landmark free trade deal on April 2 after long and contentious negotiations, which is the biggest trade pact ever for Korea and the largest for the US since the North American Free Trade Agreement (NAFTA) took effect in 1994.
A vision without a plan is just a dream" (Antoine de Saint Exupery) however, with the signing of CAFTA heralding the most important economic development for the region this year and its implementation on January 1st 2006, there is no doubt that this trade pact between the United States, El Salvador, Costa Rica, Guatemala, Honduras, Nicaragua and the Dominican Republic will make this plan a reality.
Second, Japan must acknowledge and debate the painful consequences of a free trade pact.
The theme of the February 3-5 meeting, "Profit through Quality," was an apt one in that a point of controversy over the trade pact has been casting quality and cost.