According to IIC, there are five relevant treaties for the access of products from a firm to another country:
- Preferential trade agreements: these agreements provide tariff reductions among member countries.
- Free trade zones: these treaties provide for the elimination of tariffs between nations within a trade bloc.
- Customs union: in these agreements, tariffs are eliminated among members, and common external tariffs are established.
- Common market: in addition to the features of the customs unions, it also includes the free movement of factors of production, especially labor and capital.
- Economic unions: it is the final phase of integration, including the coordination of macroeconomic policies, a common monetary system and common currency.
The IIC suggests that these agreements offer benefits to companies wishing to work in the respective markets. From an external standpoint, they generate a greater power of negotiation and a greater capacity for attracting international resources and reinvestments. “The latter, -indicates IIC-, is very much related to the capacity of the internal markets, the effective population demand and the historical stability of external financial flows.” From an internal standpoint, trade agreements enable a higher use of scale economies in the production, since they produce expansion in the effective market. Also, economic vulnerability is reduced, especially due to external factors. These rules become clear in issues such as antidumping, smuggling, para-tariff restrictions, etc. For small and medium enterprises (SMEs), the option of trading in expanded markets under trade agreements is the way of “having clear rules and have markets open up, especially in terms of associativity, indirect exports or joint ventures.”
National level
At a local level, access conditions are granted by three rules. In the first place, rules of origin that determine which country is considered as the producer of the goods in order to apply tariff preferences established in the international trade agreements. In second place, sanitary, phytosanitary and zoosanitary rules, compelling companies to take certain measures on products in regard to health care of persons, plants and animals in the country where the products are to be exported. In third place, it is possible to establish restrictions on access conditions through other technical standards, such as packaging or labeling requirements.
Comparison tool
This chart prepared by the IIC helps businessmen compare access conditions to each market:
ACCESS CONDITIONS |
VARIABLE | COUNTRY 1 | COUNTRY 2 |
General Tariff (product import tariff, without considering trade agreements or other preferences) | | |
Trade agreements with the country of origin (preferential tariff, taking into account preferences set out in trade agreements between the county of origin and the target market) | | |
Tariffs from the country of origin and the three main export countries in the target country: (preferential tariffs of competitors, to evaluate the company’s comparative conditions) | | |
Tariff of the 1st exporter of the product | | |
Tariff of the 2nd exporter of the product | | |
Tariff of the 3rd exporter of the product | | |
Non-tariff barriers: sanitary, phytosanitary and zoosanitary rules, technical standards. (generally established by national rules of the target market) | | |
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