International business agreements are central to the formation of the international market and the regulation of economic interactions as well as the promotion of trade. These are the agreements that may be bilateral/ or multilateral and which are intended towards the reduction of the trade barriers such as tariffs and quotas in order to facilitate the integration of the international economy.

Among these effects, free trade may just be among the most significant impact of trade agreements. However they help in enhancing the competitiveness of trade nations thereby leading to the increase in export and import. For example, while implementing the NAFTA – that was envisioned to foster trade between the three countries – it improved the flow of goods comprehensively by eradicating most trade obstacles in a form of tariffs. Not only that it also pushed for the economic growth and offered job opportunities to people from different industries.

Further, trade liberalization fosters investments by providing certainty of investments legal structure for the investors. Many countries when signing agreements make certain undertakings to safeguard investments made in their territory and to accord equitable treatment to investors. Such a predictability contribute to the attraction of the FDI which in turn help in the transfer of technology and economic development.

But let us look at the dynamics of the international trade in the current world. Today’s war and other forms of trade restrictions have persuaded some states to question their membership to international conventions. As such, it is seen that while countries prefer to enter into bilateral or regional arrangements, the structure of global trade is gradually developing into a fragmented form.
Besides, the contracts also contain provisions on labour and environmental conditions, which is a new trend in globalisation of trade. By these elements, countries pursue the aim of achieving the purpose of trade as implying the gain for the economy as well as individuals and environmental surroundings.

Consequently international trade agreements are important in the development of global markets through free trade, investment and social questions. But it shall be understood that these aspects shall remain as the nations come to better understand the complexity of the global economy.