Trade Agreements and Preferential Trade Programs
By Margaret Lange
Did you know that the U.S. currently has 14 bilateral or multilateral Free Trade Agreements with 20 countries and Preferential Trade Agreements with approximately 187 countries? Although NAFTA, now USMCA, is the largest of the agreements, the other agreements may also provide opportunities for you to save money when importing into the U.S., or provide expanded market access for exports of your products, with over 200 countries!
A Free Trade Agreement (FTA) is a ratified agreement between two (bilateral) or more (multilateral) countries, which defines agreed-upon international trade practices between the parties. The details and scope of each FTA vary; however, they define the obligations for all parties including trade in goods and services, market access, intellectual property rights, the environment, and other non-trade barriers. In most cases, FTAs eliminate tariffs and duties imposed on imports and exports.
Current U.S. Free Trade Agreements
Preferential Trade Agreements (Preference Programs) are unilateral trade preferences programs including reduced or eliminated tariffs on imports from designated developing countries.
The specific requirements and criteria for qualification for each Free Trade Agreement or Preference Program can be found in the General Notes (GN) of the Harmonized Tariff Schedule of the United States (HTSUS), or in the text of the agreements, which can be found on the U.S. Trade Representative’s website.
When taking advantage of the benefits that these programs offer, importers and exporters have a responsibility to do their due diligence to ensure that their goods qualify for the particular program and to maintain substantiating documentation. Importers and exporters should develop and implement documented policies and procedures related to Trade Agreements including program and data analysis, internal audit, training and education, and a reliable recordkeeping policy and procedure.
For more on Trade Agreements Programs:
U.S Trade Representative: https://ustr.gov/trade-agreements/free-trade-agreements
Harmonized Tariff Schedule, General Notes: https://hts.usitc.gov/current
International Trade Administration (ITA): https://www.trade.gov/free-trade-agreements-help-center
ITA Export Solutions: www.export.gov
U.S. Commercial Service: https://www.trade.gov/let-our-experts-help-0