The EU manages trade relations with third countries in the form of trade agreements. They aim to create better business opportunities and overcome the obstacles associated with them. According to the WTO, it can be so important to promise that there will be no removal of a trade barrier as to reduce one, as if it were predictive for businesses. This will encourage investment, create jobs and enable consumers to take full advantage of the benefits of competition – choice and lower prices. Although the three countries signed the USMCA in November, further action is needed before it becomes law. In January 2019, 60 days after the agreement was signed, the Trump administration submitted a mandatory six-page document listing changes the USMCA would make to trade law. Following the submission of the document on April 18, the U.S. International Trade Commission had to complete a report on the economic impact of the agreement. After the release in late May, the Trump administration sent a statement of administrative measures to Congress, which is needed at least 30 days in advance, and indicated that the pact could come soon. Free trade agreements, which are free trade zones, are generally outside the scope of the multilateral trading system. However, WTO members must inform the secretariat when new free trade agreements are concluded and, in principle, the texts of free trade agreements are reviewed by the Committee on Regional Trade Agreements. [11] Although a dispute in free trade areas is not the subject of litigation within the WTO`s dispute resolution body, “there is no assurance that WTO panels will comply and reject jurisdiction in a particular case.” [12] Although the WTO is generally referred to as a “free trade institution,” it sometimes allows tariffs and, in limited circumstances, other forms of protection. In practical terms, it promotes a system of rules for open and fair competition.

The EU also enters into non-preferential trade agreements under broader agreements such as Partnership and Cooperation Agreements (CPAs). The General Agreement on Tariffs and Trade (GATT 1994) originally defined free trade agreements that were to include only trade in goods. [5] An agreement with a similar purpose, namely the improvement of trade in services, is referred to as the “economic integration agreement” in Article V of the General Agreement on Trade in Services (GATS). [6] However, in practice, the term is now commonly used [by whom?] to refer to agreements that concern not only goods, but also services and even investments. Environmental provisions have also become increasingly common in international investment agreements, such as free trade agreements. [7]:104 Unlike a customs union, parties to a free trade agreement do not retain common external tariffs, i.e. apply different tariffs and other policies with respect to non-members. This function allows non-parties to free themselves as part of a free trade agreement by entering the market with the lowest external tariffs. Such a risk requires the introduction of rules for determining which products originate may be preferred under a free trade agreement, which is not necessary for the establishment of a customs union.

[20] In principle, there is a minimum processing time leading to a “substantial processing” of the products, so they can be considered original products. By the definition of products originating in the PTA, the preferential rules of origin distinguish between domestic and non-origin products: only the former are eligible for preferential tariffs provided by the ESTV, which must pay the import duties of the MFN. [21] EU trade policy is also used as an instrument to promote European principles and values, ranging from democracy and human rights to the environment and social rights.