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    Current page location: Home > Answers > Why do countries need trade deals? Why can’t they (Canada and the US for instance) just agree to not put tariffs on imports?
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    Ye Li
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    Why do countries need trade deals? Why can’t they (Canada and the US for instance) just agree to not put tariffs on imports?

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    • Time:2018-11-20 13:13:47
    Why do countries need trade deals? Why can’t they (Canada and the US for instance) just agree to not put tariffs on imports?
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    Krise Wu
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    Well, what you have just described is a…trade agreement. More or less.

    For that agreement to be meaningful, however, it has to have teeth. If one party is in breach of the agreement or is interpreting it entirely to their own benefit, there must be recourse for the other party and a way to resolve the dispute without losing the intended benefits of the agreement entirely.

    A simple handshake agreement - while it is an agreement, lacks these supporting mechanisms. That means the only recourse if one party imposed a tariff is for the other party to impose a countervailing tariff.

    #1Floor 2018-11-20 17:34:12 Reply(0)
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