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The Trade and Investment Framework Agreement – Creating Important Free Trade Pacts for the US

Where the standard Free Trade Agreement, or FTA, creates a trade bloc within multiple countries that eliminates tariffs and import quotas between borders, preliminary measures like the TIFA work to expand that bloc's trade activity to include outside nations. Connections with larger economies like the United States can prove beneficial for specific FTA countries that rely on export income to boost low GDPs, and over the past few decades the US has come to agreement with various countries and groups.

The TIFA, or Trade and Investment Framework Agreement, is exactly what the name implies - it sets the groundwork for the involved countries to come to terms that allow all parties to trade with ease. A TIFA may also serve as sort of a peace treaty in that disputes over import/export issues are resolved, which promotes an ongoing civil relationship. Presently, the United States has such agreements in place with four trade blocs in South America, Africa, and Asia:

  • ASEAN - The ASEAN treaty connects many of the lesser economies in Southeast Asia, including Laos and Myanmar, Indonesia, Cambodia, and Vietnam. While this FTA has been in effect for nearly half a century, it wasn't until recently that the United States took an active involvement in forging solid trade ties. Together, the ten ASEAN nations comprise one of the largest markets importing American goods.
  • CARICOM - This bloc comprises nearly the entire population of the Caribbean, including member nations Jamaica and Haiti, Antigua and Barbuda, Barbados, and Trinidad and Tobago. As recent as early 2012, the United States and the fifteen CARICOM have enjoyed a profitable relationship, with a forty percent increase in bilateral trade. This current TIFA is said to serve as a precursor to the CARICOM nations joining NAFTA, though no plans are solidified.
  • COMESA - The Common Market for Eastern and Southern Africa unifies much of the continent through low to zero tariffs and political stability. Though the majority of America goods traded to this bloc go to Egypt, the United States does deal with several countries for crude oil, textiles and apparel, and coffee and tea.
  • EAC - The United States presently exports an average of $1 billion in goods to the East African Community - comprised of Burundi, Kenya, Rwanda, Tanzania, and Uganda). This current trade relationship is designed to forge better relations in East Africa and improve American standing in their regional businesses.

In addition to these arrangements with larger blocs, agreements between the United States and individual nations have helped decrease trade deficits throughout the world. Current TIFAs recognized by the US include:

  • Africa - Angola, Ghana, Liberia, Mauritius, Mozambique, Nigeria, Rwanda, South Africa, and the West African Economic and Monetary Union (WAEMU)
  • The Americas - Uruguay
  • Europe and the Middle East - Algeria, Bahrain, Egypt, Georgia, Iceland, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Switzerland, Tunisia, Turkey, Ukraine, United Arab Emirates, Yemen
  • South and Central Asia - Afghanistan, Nepal, Pakistan, Sri Lanka, and the Central Asian TIFA (Kazakhstan, Kyrgyzstan, Tajikstan, Turkmenistan, Uzbekistan)
  • Southeast Asia and the Pacific - Brunei, Cambodia, Indonesia, Malaysia, New Zealand, Philippines, Thailand, Taiwan, and Vietnam

As the United States continues to forge trade relations with other parts of the world for mutual economic benefit, the country stands to gain more importance on the global stage. Foreign investment in American interests present our country with opportunities to strengthen our economy and civil political relations around the world.


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