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What is one reason two countries may sign a treaty to create a direct agreement with one another?

O to establish barriers to trade
O to cut taxes
O to collect more taxes
O to limit trade opportunities for competing companies​

1 Answer

4 votes

Final answer:

Countries may sign treaties to reduce trade barriers, providing an avenue to counter special interest pressures and committing to more liberal trade policies.

Step-by-step explanation:

One reason two countries may sign a treaty to create a direct agreement with each other is to reduce trade barriers. Trade treaties, such as the WTO agreements, exist primarily to enable countries to participate in mutually beneficial trade by lowering or eliminating tariffs, import quotas, and non-tariff barriers. Countries negotiate these agreements to counteract internal pressures from special interest groups that may advocate for protectionist measures. Instead, they can establish free trade conditions that benefit both parties. Doing so may also allow governing bodies to circumvent pressures from industries lobbying for restrictive trade measures, claiming their hands are tied due to international agreements.

These agreements can be seen as a strategy to liberalize trade by setting common rules and standards for participating countries. It's important because they go beyond national laws and directly influence how countries interact economically. Trade treaties can range from broad, multi-country agreements, such as the North American Free Trade Agreement, to bilateral deals focusing on specific sectors or issues. They serve as a platform for continued dialogue on trade and an instrument for economic policy, often reflecting a complex network of global trade connections.

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