International Agreements
International trade is based on the exchange of goods and services between different countries that take advantage of trade activities to obtain revenue for the tax authorities. These revenues are diverse and are classified into export duties and import tariffs, among others.
Both exporters and importers must pay these taxes to ship or receive goods. As a result, the final price of each good or service usually increases, as the various taxes related to foreign trade are added to their operating costs.
Faced with this reality, many governments and regional blocs have agreed to progressively eliminate tariff barriers, until they are eliminated altogether. This initiative is known as free trade, international agreements that are reached after years of intense negotiations between the interested parties as well as internal issues in each country.
Multilateral organisations, such as the World Trade Organisation (WTO), promote free trade as an alternative for economic development.
