Bilateral Trade...

 

Bilateral trade agreements are those initiated and enacted upon between two nations, territories or economic blocs. For instance the EU has working trade agreements with the EEA and EFTA which are multilateral blocs in the Pan EURO-MED Economic sphere of interests whereas it also has separate agreements with particular nations such as South Korea and South Africa with which the EU has bilateral agreements.

There are both advantages and disadvantages to bilateral agreements. The greatest being that the scope of goods and services which are effected are usually narrower or concentrated as they focus on the needs and dynamics of trade between just the two parties. Multi lateral agreements are more complicated as they take more factors into consideration as the rules and regulations of several parties need to be harmonized. However in the latter case the dynamics and momentum offered by the many through peaceful trade negotiations on a broader scope often outweigh the mutual benefits of the more channeled marketed which exist between just the two entities. The EU is in itself a multilateral agreement which acts after internal negotiations as one entity when initiating a bilateral free trade agreement with another state outside the European Union.