Definition of Trade Agreement

The trade agreement it's a recurring act at the request of the Commerce and that it consists precisely in the agreement that two or more parties seal about a theme associated with trade.
It should be noted that not only private companies can subscribe an agreement of this type, but it is also common for governments, public entities, among others.

As we know, trade is based on the purchase and sale of goods and services that will be traded by whoever acquires them, precisely, to obtain an economic return from them and on the other hand they will be acquired by those individuals who need or like the same. It is also possible that the goods are acquired to be resold or to use their raw materials in the manufacture of other products, there are so many other alternatives.

Normally economic agreements are signed with the mission of generating or increasing commercial benefits, either as we said of a country or several, or of the companies involved in the commercial agreement.

A company that makes chairs signs a trade agreement with a popular furniture designer to have him design an exclusive and limited line of chairs. In this case, the company will surely maximize its chair sales because people want to have a chair designed precisely by the designer of the moment.

Argentina signs a commercial agreement with China to sell dairy exclusively, that is, no other country will sell products of this kind there. category. In this case, not only the country will benefit from the income economic benefits that accrue from this agreement but also the companies that produce them because they will have a market to which to sell their products exclusively.

It is also practice It is recurring that countries that are in the same region enter into trade agreements to sell their own products among themselves, establishing attractive prices for those products if the exchange trade is carried out between them.
Likewise, these agreements may stipulate the app of preferential tariffs and the reduction of taxes, when the commercial exchange involves those countries that have signed the trade agreement.