Free Trade Agreement - What's In It?


Treaty, which in recent vocabs called a Free Trade Agreement, is curated according to international law for forming a free-trade location between corporate countries. Trade Agreement is of two types which are bilateral and multilateral. Bilateral Trade agreements occur when two countries agree to remove some of the trade restrictions among two of the agreement bearers for expansion of business opportunities. Whereas, Multilateral Trade agreements are among three or more countries and are the most difficult for negotiation and agreement. A Free-Trade Agreement in the United States means where the goal of trade agreements is for reducing barriers to U.S. exports and protecting United States interests from abroad competition and amplify the rule of law in the FTA partner country or countries.

For the sixth round of Free Trade Agreement (FTA) negotiations between the UK and India, the British Trade Secretary Kemi Badenoch will be in New Delhi. Notwithstanding with past business success and failures, Badenoch met her counterpart, Indian Minister of Commerce and Industry Piyush Goyal, for the first time in person, with the aim of strengthening ties between the two countries and reinvigorate talks on an ambitious bilateral trade deal.

India and United Kingdom Free-Trade Agreement

The talks talking, for the first formal round since July will be targeting a deal for cutting tariffs and open opportunities for the United Kingdom services which include financial and legal by making it easier for the British businesses for selling to an economy set to be the world’s third largest with a middle class of 250 million people by 2050. 

During her visit, the Trade Secretary will also be meeting with business leaders for betterment of understanding their needs for a modern United Kingdom – Indian trade relationship. This will be including a meeting with envoPAP, a United Kingdom company investing more than 10 million pounds in India for million pounds in India for constructing a plant production Fairtrade paper and packaging products.

"I'm here in New Delhi to kickstart round six of UK-India trade negotiations and meet my counterpart Minister Goyal in person to drive progress on this agreement.” Secretary of State for International Trade Kemi Badenoch said.

Trade Kemi Badenoch continuted, “Both nations have come to the table with the very highest of ambitions and a willingness to work together towards a mutually beneficial deal. I'm excited about the opportunities we can create for British business. India and the UK are the 5th and 6th biggest economies in the world. We have a long shared history, and are in pole position to do a deal that will create jobs, encourage growth and boost our 29-billion-pound trading relationship."

A strong growth in the Indian economy is projected to boost UK exports to India by over nine billion pounds by the middle of the next decade, and UK businesses are already taking advantage of the flourishing trading relationship.

Among those expanding in India UK household is Pret A Manger and fintech pioneers Tide and Revolut . British coffee and sandwich retailer Pret will open its first branch in India early in 2023 following a franchise partnership with Reliance Brands. Mumbai will be the chain's first branch, as part of a plan to open 100 in total across the country.  

“Bringing Pret's freshly made food and organic coffee to more people around the world is a key part of our transformation strategy, and I'm delighted to be launching Pret in India,” Pano Christou, CEO, Pret A Manger, said.  Pano Christou continued, “With strong demand for fresh food and new dining experiences, we see an exciting opportunity to grow the Pret brand across India while also adding something truly unique to its food-to-go market.” 

“The UK-India FTA remains a top priority for industry. We applaud the Secretary of State and the Prime Minister for listening and prioritising substance over pace. Trade is a fundamental driver of growth and India will be an important partner and market as the UK looks to escape stagflation, attract skilled labour and deliver on the green transition,” Andy Burwell, International Director at the Confederation of British Industry, said. 

Alike businesses these could benefit from a reduction in red tape, more affordable cross-border trade, and increased opportunities to work with Indian companies and suppliers thanks to the Free Trade Agreement.

Factors Determining Free Trade Agreement

Free Trade Agreement is a form of trade pact which is determined by the tariffs and duties that countries impose on import and export with the aim of reduction or elimination of trade barriers. Elimination of Free Trade Barriers encourages international trade. Such agreements are usually revolved around on a chapter. The agreements provide preferential tariff treatment. The clauses which are often witnessed in the agreements include trade facilitation and rulemaking in the areas of investment, intellectual property, government procurement and technical standards. The sanitary and phytosanitary issues are also solved through Free-Trade-Agreement.  

The most important distinctive characteristic between customs unions and free trade us the approach to third-parties. The two-types of trading blocs have internal arrangements which the parties conclude for liberalizing and facilitating trade among themselves. As the customs union need all parties for establishing and maintaining identical external tariffs with respect to the trade with non-parties, parties following a free-trade area are not subject to the exploitation. In complexion, the parties might be able to establish and maintain whatever tariff regime applies for imports from non-parties as the agreements are necessary. In free-trade locations where there are no external tariffs without harmony, there is risk of trade deflection eliminated. The parties will be adopting a system of preferential rules of origin.  

Free Trade Agreement History

The General Agreement on Tariffs and Trade which is known as GATT 1994 which in primitive terms is defined as Free Trade Agreements for inclusion only trade in goods. An agreement with almost equivalent purpose is relied upon for liberalization of trade in services which is named under Article V of the General Agreement on Trade in Service (GATS) as an “Economic Integration Agreement”.  

In practice, the terms are in wide use in the fields of political science, diplomacy and economics for directing to agreements which cover goods and services including investment. Envisioning to environmental provisions, the terms have also gained usage in international investment agreements.  

International Free Trade Agreement Chips

Partner countries can help a company enter and compete more easily in the global marketplace because of reduced trade barriers while selling to the United States Free Trade Agreement. Free Trade Agreements address a plethora of foreign government activities that are affecting an everyday business through – tariff reduction, stronger intellectual property protection, opportunities for United States exporter input in the development of FTA partner country standards, fair treatment for United States investors, enhance opportunities for competing for foreign government procurements and opportunities for United States services companies.  

In current times, the United States has 14 FTAs with 20 countries. FTAs can be helpful for a company’s entrance and competition to easier acquisition of productions in the global marketplace through zero or reduced tariffs and related provisions. While the mainstream of every FTA varies, the FTAs in general provide reduction of trade barriers and creation of a more predictive and transparent trading and investment environment. It is then easier and cheaper for the United States businesses to export their products and services to trading partner and markets.  

Some Key Points Defining Free Trade - 

  • Qualified businesses get reduced tariffs or eliminated tariffs. As an example – a country with normal charges of a tariff of 12 percent of the value of the incoming product which eliminates that tariff for products originating in the United States, thereby creating competitive markets.  
  • Intellectual Property Protection and enforcement of law which is American-owned intellectual property rights in the FTA partner country.  
  • Product Standards can authorize United States exporters to participate in the development of the product standards in the FTA parnter country.  
  • The proficiency for a U.S. company to bid on certain government procurement in the FTA partner country is stated by the stats of the Sells to the government.  
  • The proficiency for U.S. service suppliers to supply their services in the FTA partner country is termed as Service companies and helps in Free Trade Agreement.

For U.S. investors providing they be treated as favorably as the FTA partner country treats its own investors and their investments or investors and investments from any third country is helped by Fair treatment.


Notwithstanding with the customs union, parties to an FTA are not maintaining common external tariffs which means they apply to different customs duties and the other policies with regards to non-members. The feature created is possibly helping non-parties which might free-riding preferences according to an FTA by penetrating the market with the minimum external tariffs. This gives the opportunities for creating the possibility of non-parties which might give free-riding preferences by penetrating market with the lowest external tariffs. There is a requirement of a lower extent of processing that results in ‘substantial transformation’ to the goods so that those can be considered originating.